Labour is calling on Mr Key to apologise for saying she should stick to acting.
Castle-Hughes is an ambassador for a Greenpeace climate change campaign urging the Government to sign up to 40 percent emissions reductions.
"My advice to Keisha is this: stick to acting," Mr Key told a business gathering of 500 people in Brisbane on Tuesday.
Since then Castle-Hughes has offered to meet Mr Key to discuss her concerns.
She said she knew a lot more about the issue than he gave her credit for.
"I'm pretty tied up with a whole lot of other things that I'm doing but I'd be more than happy to have a chat with her at some stage," Mr Key told reporters in Cairns where he was attending the Pacific Islands Forum leaders meeting.
"I think it should be seen in the context of a rather flippant comment, but nevertheless it's a very serious point."
He said if New Zealand followed her suggestion and reduced emissions by 40 percent on 1990 levels by 2020, that would effectively mean they would have to fall by 64 percent because they were at present 24 percent above 1990 levels.
"That would have a catastrophic effect on the New Zealand economy," he said.
In Parliament, Acting Prime Minister Bill English was questioned about Mr Key's remark.
Labour's Charles Chauvel asked: "Does the Prime Minister agree with Keisha Castle-Hughes that telling her to `stick to acting' is really odd, given that he had previously encouraged her to make a submission to the Minister for Climate Change Issues on New Zealand's pollution reduction target?"
Mr English said the Mr Key "wholeheartedly" supported Castle-Hughes' right to have a public view about New Zealand's climate change policy.
Mr Chauvel then asked if the prime minister thought other actors supporting the campaign including Lucy Lawless, Robyn Malcolm, and Cliff Curtis, should stick to acting.
"And has he advised Michael Jones to `stick to rugby and keep out of politics', or do different rules apply to potential National Party recruits?"
Mr English said those in the group were all eminent New Zealand actors.
"And sticking to acting may well be a recipe for further success for them."
He said an ad campaign did not replace serious analysis and a 40 percent reduction in carbon emissions by 2020 would seriously hurt the economy and people's livelihoods.
In a later statement Mr Chauvel said Mr Key should apologise.
"Young New Zealanders, whatever their profession, should never be discouraged from taking a stand on issues they feel passionately about and the Prime Minister's decision to criticise the Kiwi actress for doing so to an overseas audience was a bad call."
He said Mr Key was not asked for an opinion on Castle-Hughes' views when he made the jibe.
"Shame on you Prime Minister. You've set a bad example. It's time to do the right thing and apologise."
