During the show Baron Cohen, promoting his upcoming movie 'Bruno', in which he plays a gay Austrian fashionista, flew down from the ceiling on a harness. He appeared to get tangled in the wiring and asked to be let down as the cords were trapped around his "kugelsack".
He landed above Eminem, straddling the rapper's shoulders with his naked buttocks.
Eminem appeared to be furious, shouting: "Are you serious? Get this mother f***er off me man."
Members of the rap group D12, who were with Eminem, including Swifty, Kuniva, and Bizzarre all helped to remove Bruno before they all left the Awards.
For a moment it looked as though a stunt had gone terribly wrong and that MTV was about to be on the receiving end of an incident such as Nipplegate when Janet Jackson suffered a "wardrobe malfunction" during her 2004 Super Bowl performance and bared a breast on CBS.
The broadcaster was fined $550,000 and the case is still in the courts.
Celebrities in the crowd, including Cameron Diaz and 'High School Musical' stars Zac Efron and Vanessa Hudgens, were laughing and gasping in disbelief at the same time.
Comedian Scott Aukerman, who was appointed head writer for the MTV Movie Awards, has cleared all confusion regarding whether Eminem was warned about the stunt, confessing on his blog that it was rehearsed.
He wrote: "Yes, the Bruno/Eminem incident was staged. That's all anyone wants to talk about, so let's get it out of the way.
"They rehearsed it at dress and yes, it went as far as it did on the live show then."
'Bruno' follows the success of 'Borat: Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan'.