The 44-year-old actor, who has thrice played the role of James Bond since 2006, dismissed Stewart's ambitions to star in the franchise but admitted he was only being 'nasty' because their new films 'Skyfall' and 'Twilight Saga: Breaking Dawn - Part 2' are in the box office race, reported Contactmusic.
Asked whether the 'Twilight' star would be the right fit for a Bond movie, Craig said, "Would she make a good 'Bond' girl? No, she's in 'Twilight'".
But he soon added, "No, I'm being nasty. It's only because the film ('Skyfall') is coming out at the same time (as 'Breaking Dawn - Part 2'), we're in direct competition. I'm sure she'd make a great Bond girl."
The final instalment of the vampire franchise has already swept the box office, pushing "Skyfall" to No. 2 position in the overseas market.
Stewart previously admitted she is interested in reading a Bond script.
"I would love to read a few graphs of the script. I choose my roles really instinctually. I would really have to connect with the material," the actress said.
"As long as I get to have a gun. Yes, hell yeah!" she added.