"You cannot be my friend and use that word around me," Winfrey, 59, told Parade magazine. "It shows my age, but I feel strongly about it."
She said the use of the slur reminds her of "people who heard that as their last word as they were hanging from a tree."
Winfrey said many young people today "don't know diddly-squat" about the civil rights movement.
"Do we live in a land where Martin Luther King's dream has been ultimately fulfilled? No. Has part of the dream been fulfilled?" she asked, nodding. "Are more people judged by the content of their character than by the color of their skin? Yes. Is everybody judged by the content of their character? Absolutely not."
Winfrey will soon be seen opposite Forest Whitaker in "Lee Daniels' The Butler," a historical drama about a servant who worked at the White House from 1952 to 1986.