Tornatore, best known for his 1988 "Cinema Paradiso", which took home the Oscar for best foreign language film, was accused by former TV starlet Miriana Trevisan of fondling and kissing her in his office 20 years ago.
"I went to Giuseppe Tornatore's office. My agent organised the meeting. It wasn't an audition, but a first meeting in view of a film in production," the 44-year old said in an interview with Vanity Fair.
When she got up to leave, "he followed me to the door, pushed me up against the wall and started kissing my neck and ears, his hands roughly fondling my breasts," she alleged.
"I managed to get away from him and run out the door," she said, adding that Tornatore "probably doesn't even remember it".
The Sicilian director, 61, told La Repubblica daily he did remember the meeting, insisting: "I never laid a finger on her".
"I remember a cordial meeting, and reject the insinuations made," he said, adding that he was considering legal action.
The accusation is the latest in a month-long torrent of allegations engulfing male power players in Hollywood and from the worlds of politics, finance and journalism. Also on Saturday, prominent Austrian politician Peter Pilz resigned as head of his newly formed party over sexual harassment allegations.
Accounts of abuse by Hollywood mogul Harvey Weinstein that were published last month in The New York Times and The New Yorker encouraged others to speak out. Weinstein has denied the allegations.