According to celebrity news site TMZ, eyewitnesses say Azealia was laughing at the choice of music and calling Russell and one of his guests "boring white men".
Azealia shared a different version of events on her Facebook account, but the post has now been deleted.
In it she claimed Russell, "choked me, threw me out and spat at me".
She added: "The men in the room allowed it to happen. I feel terrible today."
The American star was brought to the hotel room as the plus one of rapper RZA.
In the version of events on TMZ, an unnamed female guest challenged Azealia's behaviour.
Azealia is said to have responded with "you would love it if I broke my glass, stabbed you guys in the throat, and blood would squirt everywhere like some real Tarantino s***".
She's said to have raised a glass as if she was going to throw it - that's when Russell reportedly took action and removed her from the room.
Both sides of the story say that the n-word was used
Azealia said in her Facebook post that it was Russell directing it at her.
TMZ says guests state that they came from Azealia during her outburst, in which Russell stayed "remarkably calm".
RZA is also to have supported reports that the n-word came from Azealia, not Russell.
Russell has not spoken about the event
No comment on this from Russell Crowe yet.
Although a prolific tweeter, he has not posted anything since Saturday evening.
In a statement Azealia's representative says she "is tremendously distraught and disheartened. She is shell shocked and will speak out on the incident once she has had time to process the brutality and abuse she was unjustly subjected to".
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