"That's illegal? Seriously, that's illegal in Egypt?" Stewart said. "Because if insulting the President and Islam were a jail-able offense here, Fox News go bye-bye."
Stewart said he is friends with the comedian, adding that Youssef loves both Islam and Egypt.
Stewart also questioned why Morsi is worried about a comedian like Youssef, who is sometimes referred to as "Egypt's Jon Stewart."
"What are you worried about, Mr. President of Egypt?" Stewart said. "The power of satire to overthrow the status quo? I've been doing this crap fest for 15 years, granted I'm not as popular as Bassem, but we've had our nights. And just so you know, there's been a grand total of zero toppled governments we've brought about during the time."
Watch (part 1):