Franco said he heard Korine was banned from the show after he pushed Streep backstage.
"He said he was a little out of it," Franco said of the "Kids" writer and "Gummo" writer-director.
"Harmony is a very sane guy now -- a great artist and great person to work with. But I think he had a period where he was going a little off the rails, so maybe he was on something that night," Franco said.
"I went upstairs to greet Meryl Streep and welcome her to the show, and I knock on the door ... and she was not in there," Letterman said of the last time Korine visited the "Late Show" studio in the late 1990s. "And I looked around, and she was not in there, and I found Harmony going through her purse. True story. And so I said: 'That's it. Put her things back in her bag and then get out.'"
"So, you kicked him off?" Franco asked Letterman, to which the talk-show host nodded emphatically as the studio audience applauded.
Apparently convinced by Franco's assertion that Korine is now a changed man, Letterman said he would be "more than happy" to have him back as a guest.