The pair, who enjoyed a much publicised bromance during last year's series of the talent show, wound each other up during filming at the London Palladium yesterday.
Walliams and Cowell were greeted by the audience with equally loud cheers at the Palladium, but the pair appeared to be competing to score points and embarrass each other.
The Little Britain comic teased Cowell about having "a lot of work done" to make himself look younger, mocked his fellow judge's love life and accused him of turning the atmosphere sour at the auditions with his constant criticism.
He also ridiculed Cowell's recent purchase of a horse with Ant & Dec, moaning that "someone is getting paid too much" and claimed that people don't want to hear about it.
A source told Digital Spy: "Walliams was continually winding up Cowell with his gags, but unlike last year, the big boss wasn't finding them funny.
"The bromance appears to be over and the audience and acts could see tension growing between the pair."
At the end of the afternoon session's filming, the duo bickered over a dance act and Cowell suggested that the performers lacked likeability.
"It's never held you back," sniped Walliams. "I'm a good judge, it doesn't matter if people like me," snapped Cowell in response.
Britain's Got Talent returns to ITV in the spring.
Watch our interview Simon Cowell, Ant & Dec and the BGT judges:
[The Best of Britain's Got Talent - Photo Gallery]