Chen said university officials told him his criticism of the Chinese government may threaten potential academic cooperation between China and the university, which recently opened a campus in Shanghai, The New York Times reported Sunday.
Chen, a self-taught lawyer who is blind, was allowed to leave China with his family last year after taking refuge in the U.S. Embassy in Beijing following his escape from house arrest.
"The work of the Chinese Communists within academic circles in the United States is far greater than what people imagine, and some scholars have no option but to hold themselves back," Chen said. "Academic independence and academic freedom in the United States are being greatly threatened by a totalitarian regime."
The New York Post first published the story last week.
In a statement Sunday, NYU denied Chen's claims.
"We are very discouraged to learn of Mr. Chen's statement, which contains a number of speculations about the role of the Chinese government in NYU's decision-making that are both false and contradicted by the well-established facts," spokesman John Beckman said in the statement.
The university said Chen's law school fellowship was always meant to last a year, and those who worked with him in recent months said he understood the time restriction for the fellowship, the Times said.
The fellowship's end, Beckman said, "had nothing to do with the Chinese government; all fellowships come to an end."
Chen, 41, said the school had given him and his family until the end the month to leave the faculty apartment.
Jerome Cohen, a law professor who helped arrange Chen's fellowship, said NYU was especially generous, providing him with transportation, security and private lessons in law and English. Cohen said Chen had at least two job options, including one at Fordham University and another at the Witherspoon Institute, a think tank, the Times said.
"They have done more than imaginable, but I don't know how anyone could stay here at NYU on a continual basis," Mr. Cohen said last week. "No political refugee, not even Albert Einstein, has received better treatment."