The season two episode shows Jez in blackface while in bed with his girlfriend Nancy in a bid to “break a taboo”.
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A Peep Show scene featuring blackface has been removed from Netflix.
However, the episode, which first aired in 2004, remains unedited on Channel 4’s streaming service All 4.
Channel 4 told Sky News: “We do not believe that erasing our creative history is a quick fix for the issues affecting our society today.”
The moment appears in the season two episode Dance Class, during a bedroom scene featuring Jez and his girlfriend Nancy, played by Robert Webb and Rachel Blanchard respectively.
In the scene, Jez says: “It just feels almost wrong. Are you sure this isn’t racist?”
Nancy replies: “We’re breaking a taboo, of course it feels wrong. We’ve got boundaries to smash, Jeremy.”
Nancy later adds: “Jeremy, I come from America. I’ve seen the problems race brings up.”
Webb previously discussed the problematic scene with Vice in 2015, telling the magazine: “With any kind of jokes in sensitive areas, you have to ask yourself, ‘What is this joke doing? Whose side is this joke on? How is it going to be misinterpreted and will they have a point if they misinterpret it?’ Those are the kind of things you have to ask.”
Peep Show, which also stars comedian David Mitchell, ran for nine series between 2003 and 2015 on Channel 4.
Filmed through point of view shots, with characters speaking directly to camera, the cult comedy is now part of the archive content on both Netflix and All 4.
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Channel 4 told Sky News that they understand some historic content could now be regarded as “inappropriate” and appreciate that it will provoke “strong feelings”.
“It is a complex issue particularly when it relates to programmes that satirised, commented on or challenged a specific moment in our culture that is no longer relevant to audiences today,” the broadcaster added.
Sky News has also contacted Netflix for comment.
Other UK shows which have had episodes edited or removed from streaming platforms due to the use of blackface and perceived racial insensitivity include Fawlty Towers, Little Britain and Bo Selecta.
In America, scenes from The Office, Scrubs, Golden Girls and 30 Rock have also been pulled.
HBO Max in the US also temporarily removed Gone With The Wind over “racist depictions” but the 1939 film has now been reinstated with a disclaimer and supporting content discussing of its historical context.
Earlier this month, in the wake of the Black Lives Matter movement, Channel 4 set up a panel to decide which of their archive shows will be kept and which will be removed.
Its service is made up of over 10,000 hours of programming spanning over 30 years.