Hell Pizza pulled the advertisement from its Web site Monday after family members of the first man to scale Mt. Everest objected to the animated ad's use of Hillary's skeletal likeness dancing to Michael Jackson's "Thriller" alongside actor Heath Ledger and the Queen Mother, The Wellington Dominion Post reported Monday.
Rachael Allison, head of marketing for Hell Pizza, said the advertisement was designed for distribution to a "select" group of 7,000 people and was not intended for widespread distribution.
"It was Hell's way of having a bit of fun over Halloween. It was never our intention to cause offense (and) we apologize to the Hillary family."
Peter Hillary, son of the mountain climber who died in January at the age of 88, earlier described the ad as "a little grotesque," The Daily Telegraph (Britain) reported.
"I don't think it's funny and I'm not very impressed," he said. "It is early days and it's still pretty raw. It's extremely poor taste really."
"The reality is they've put it on the Internet. It is now uncontrollable. The damage is done," Peter Hillary said.