The excerpt in question:
"One day, as I sat in our driveway in Long Island playing with blocks and buckets, my curiosity got the best of me. Grace was sitting up, babbling and smiling, and I leaned down between her legs and carefully spread open her vagina. She didn't resist and when I saw what was inside I shrieked."
"My mother came running. 'Mama, Mama! Grace has something in there!' "
"My mother didn't bother asking why I had opened Grace's vagina. This was within the spectrum of things I did. She just on her knees and looked for herself. It quickly became apparent that Grace had stuffed six or seven pebbles in there. My mother removed them patiently while Grace cackled, thrilled that her prank had been a success."
After the politically conservative site Truth Revolt alleged she had abused her sister, Dunham, 28, took to Twitter.
"The right wing news story that I molested my little sister isn't just LOL – it's really f------ upsetting and disgusting," she wrote.
"Usually this is stuff I can ignore but don't demean sufferers, don't twist words," she continued. "I told a story about being a weird seven year old. I bet you have some too …"
One person who's apparently taking the situation in stride: Dunham's sister. In her final Tweet, Dunham wrote, "I wish my sister wasn't laughing so hard."