NSW Labor upper house leader Penny Sharpe said she was "physically sickened" by the now-deleted tweet, in which Mr Latham made unsavoury comments about independent MP Alex Greenwich's sexuality.
Mr Latham's tweet was posted in response to an article in which Mr Greenwich called the NSW One Nation leader "a disgusting human being" after LGBTQI protesters were targeted outside an event Mr Latham was speaking at.
"Disgusting?" Mr Latham said, before describing sex acts between two men in disparaging detail.
The tweet, posted shortly after 10am on Thursday, was deleted within a few hours, but not before several Twitter users screenshotted and reposted the comment to the site.
Mr Greenwich told AAP he would not be commenting on the matter.
"My focus in the parliament will be working with the majority of members who support the LGBTQ community to progress important reforms," he said.
Ms Sharpe, however, did not hold back.
"Homophobia is always unacceptable and there is never an excuse," she said.
"Mr Latham should apologise to Alex Greenwich immediately."
AAP contacted Mr Latham for comment but did not receive a response by publication.
Mr Greenwich earlier criticised Mr Latham after a mob of hundreds of people attacked LGBTQI activists outside a church in southwest Sydney in the lead-up to the NSW election.
The small group of peaceful protesters were surrounded and threatened by 'Christian Lives Matter' activists outside the event in Belfield, where Mr Latham had been invited to speak about parental rights.
Three men were charged following the incident.
"No one should take the law into their own hands. Violence at political events is wrong," Mr Latham tweeted at the time.
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