The two have worked together more than 25 years ago on Penn's directorial debut, "The Indian Runner".
Penn described Bannon as "bitter" and "bloated" to website Death and Taxes, reported People magazine.
"Bannon was then, as he is now, simply another bitter Hollywood wannabe who went rogue by way of toxic narcissistic iconoclasm.
"But, deep in his heart, he's just a conniving hateful bloated punk who despises mankind. And then there are also the bad things about him," Penn said.
After Bannon went on to invest in NBC's "Seinfeld" in 1993, a decision that continues to pay off as the show runs in syndication.
Penn is not the only Hollywood star to take a shot at Bannon as actor George Clooney had told a French news channel that, "Steve Bannon is a failed film writer and director.