The actor and director's comments came a day after Dylan Farrow, 28, renewed claims dating back to Allen's tempestuous relationship with actress Mia Farrow in the early 1990s.
Allen's publicist Leslee Dart said today that Allen had read Dylan Farrow's open letter, published online by The New York Times, claiming she was sexually assaulted by her then adoptive father as a seven-year-old.
"Mr Allen has read the article and found it untrue and disgraceful," said Ms Dart, who said Allen would be responding soon.
Dylan Farrow claimed that in 1992 at the family's Connecticut home, Allen led her to a "dim, closet-like attic" and "then he sexually assaulted me". Farrow did not specify Allen's actions, but described other abusive behaviour.
Allen was investigated over the 1992 accusation, but prosecutors elected not to charge him.
The handling of the investigation was criticised after Litchfield County state attorney Frank Maco said in a press conference that he believed there was "probable cause" to charge Allen but decided against prosecution partly to avoid a traumatic trial for the young girl.
A disciplinary panel found that Mr Maco may have prejudiced the ongoing custody battle between Allen and Mia Farrow by making an accusation without formal charges.
Mr Maco, who retired in 2003, said today that the statute of limitations on Dylan Farrow's accusations ran out at least 15 years ago. He said he hoped she was able to watch his news conference and read his statement about his decision not to prosecute Allen.
"I hope she has access to that statement, to know what I did and why I did it," Mr Maco said. "I hope she finds some peace and solace at this time."
A spokesman for the Connecticut Division of Criminal Justice said the prosecutor's office would not re-examine the case unless it was asked to.
The 1992 allegation came shortly after Allen became involved with Mia Farrow's adopted daughter, Soon-Yi Previn. Allen, then in his mid-50s, was not the adoptive father of Ms Previn, who was about 19 at the time. The two married in 1997 and have two adopted daughters.
Months before Mr Maco's press conference, a team of child abuse specialists from Yale-New Haven Hospital were brought in and concluded that the child had not been molested.
Allen's lawyer Elkan Abramowitz said: "It is tragic that after 20 years a story engineered by a vengeful lover resurfaces after it was fully vetted and rejected by independent authorities. The one to blame for Dylan's distress is neither Dylan nor Woody Allen."
Ms Farrow's open-letter did not urge renewed legal action, but a retrial for Allen in the court of public opinion. Ms Farrow, who now lives in Florida and is married and goes by another name, argued for fans of Allen's movies and actors who star in his films not to "turn a blind eye".
Sony Pictures Classics, which regularly distributes Allen's films including his latest, Blue Jasmine, urged caution in any rush to judgment.
"This is a very complicated situation and a tragedy for everyone involved," the company said in a statement. "Mr. Allen has never been charged in relationship to any of this and therefore deserves our presumption of innocence."
Alec Baldwin, who has starred in Allen films, including Blue Jasmine, was among those Ms Farrow singled out in her letter. Baldwin responded on Twitter to those demanding a comment from him.
"You are mistaken if you think there is a place for me, or any outsider, in this family's issue," he said.