The director insisted that Oscar voters were wrong to leave the 34-year-old off the list of nominees for 'Best Actor' following his full-frontal performance in Shame.
> Oscars 2012: What did the Academy miss?
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"In America they're too scared of sex, that's why he wasn't nominated," McQueen told PA.
"If you look at the best actor list you're saying, 'Michael Fassbender is not on that list?' It's kind of crazy. But that's how it is, it's an American award, let them have it."
McQueen went on to praise Fassbender's talent, saying that he is a unique presence of the screen.
"He's a once in a generation actor. He's an actor who can transform and transcend, and you actually believe him, so that's the kind of guy he is," he added.
Fassbender is currently developing a film about Irish mythological hero Cúchulainn with Ronan Bennett.
> Michael Fassbender: 'I pick movies over love'
> Oscars 2012: Academy Awards nominations - in full