The cast took on characters from the spooky and camp 1970s musical in a themed episode, which scored huge ratings last week (ends29Oct10).
But Gay & Lesbian Alliance Against Defamation (GLAAD) officials have taken issue with the use of the word 'tranny' to describe Rocky Horror's chief character Frank-N-Furter, who dresses in stockings, lingerie and high heels.
In the Glee tribute, actor Harry Shum Jr.'s character Mike is forced to pull out of his role as Frank-N-Furter because his conservative parents don't want him to look like a "tranny".
A statement from GLAAD reads, "The casual manner in which the word was used is jarring, even if he (Shum, Jr's character) may have been repeating what his parents said.
"This inclusion of this slur is particularly alarming given last season's powerful episode in which Kurt's father chastised Finn for using the word 'f*g'. That episode sent a powerful message to the show's young fanbase that words have power and they can hurt.
"Unfortunately the larger problem here is that the word 'tranny' has become an easy punchline in popular culture, and many still don't realise that using the term is hurtful, dehumanising and associated with violence, hatred and derision against transgender people - a community that is nearly invisible in media today."