During Waitangi celebrations this month, a protester shouted "that's for raping our sovereignty" before throwing the large fake pink penis, hitting Mr Joyce in the face.
Afterwards, the Mr Joyce joked on Twitter: "someone send the gif over to John Oliver so we can get it over with".
The Last Week Tonight host featured it on the latest episode of his HBO show. In it, Sir Peter Jackson waves a flag with Mr Joyce's face and a sex toy on it, and features the line "we made your country a new flag. Here's Peter Jackson to show it to you".
Today, Mr Joyce denied he was responsible for the send-up.
"I wouldn't have been able to have taken any odds on him [Oliver] not doing it. But he certainly dug deep, and perhaps the tweet inspired him a little bit. But hopefully he's got it out of his system.
"It was a fairly lengthy exposition, but he probably felt he had a bit of material to work with."
Prime Minister John Key was less enthused, saying the skit was "pretty predictable", although he did say he found it amusing.
"But there's a long history of these late night shows having a go at politicians. We focus on it because it's New Zealand but, to be honest, anyone who has watched Jimmy Fallon or going all the way back to Letterman and Jay Leno and those guys, a huge amount of it is focussed on politicians because we are easy targets."
Labour leader Andrew Little said he thought the report was "hilarious".
"I thought that it was a bit of a slap in the face for New Zealand, that once again we are being ridiculed by an international comedian. Nothing wrong with a gentle ribbing, but I think that when you have dancing dildos, a Hallelujah chorus and a scene of raining manhood, it goes beyond gentle mockery.
"It's a bit hard for Steven Joyce to be accused of doing anything wrong, when actually this starts with John Key going to David Letterman several years ago and, frankly, making an ass of himself."
In 2009, Mr Key appeared on the Late Show, with Letterman poking gentle fun at New Zealand. Tourism NZ had pushed for a spot on the show so that Mr Key, New Zealand's tourism minister, could push the country's profile.
Asked if Peter Jackson could have been expressing opposition to the flag-change process with his participation in the John Oliver skit, Mr Little told media that he hadn't considered that.
"He may well be, I don't know. To be honest, you are working at meta-levels that I don't operate at."
