Steven Crowder, who has almost four million subscribers on the Google-owned video-sharing platform, claims to host the “number one conservative late night comedy show”.
In some of his films, he has been accused of making repeated homophobic and racist slurs towards Carlos Maza, a writer and video host for technology website The Verge.
Content on Mr Crowder’s channel shows him mocking Mr Maza’s accent, hand movements, and describing him as a “lispy queer” and frequently highlighting that he is a “Mexican gay guy”.
The YouTuber also sells on his website a T-shirt featuring an offensive homophobic insult, with one letter omitted, which some fans have edited to include Mr Maza’s name and image.
In response, Mr Crowder said he has never encouraged viewers to engage in harassment, calling his own comments “harmless”.
He also defended his videos, saying it is a comedy show and that his team ensures it follows the rules.
YouTube has admitted that the content is “clearly hurtful” but said it would not remove the films because they do not violate its policies.
“Our teams spent the last few days conducting an in-depth review of the videos flagged to us, and, while we found language that was clearly hurtful, the videos as posted don’t violate our policies,” the company said on Twitter.
“As an open platform, it’s crucial for us to allow everyone – from creators to journalists to late-night TV hosts – to express their opinions within the scope of our policies.
“Opinions can be deeply offensive, but if they don’t violate our policies, they’ll remain on our site.
“Even if a video remains on our site, it doesn’t mean we endorse/support that viewpoint.
“There are other aspects of the channel that we’re still evaluating – we’ll be in touch with any further updates.”
YouTube’s harassment and cyberbullying policy states that “content that is deliberately posted in order to humiliate someone” and “content that makes hurtful and negative personal comments/videos about another person” is not allowed on its platform.
Reacting to YouTube’s decision, Mr Maza said: “I don’t know what to say.
“YouTube has decided not to punish Crowder, after he spent two years harassing me for being gay and Latino.”