The Labour MP for Brent Central, said she was in a members-only lift in the Palace of Westminster when another MP said to her: "This lift really isn't for cleaners."
She said it was racist of the MP, who she refused to name, to assume she was a cleaner.
She told BBC 5 Live's Pienaar's Politics that the incident was one of many experiences of racism.
Asked if she had ever faced racism in Parliament, she said: "Yes - God, there are so many incidents.
"There was a time when I was in the lift. It was a members' lift that Members of Parliament use specially in cases (when) we have (to) get to places quickly.
"I was in the lift and some other MP said, 'This lift really isn't for cleaners'."
In 2008 the 48-year-old wrote an article for the Fawcett Society in which she described how former Tory minister David Heathcote-Amory had accused her of not being an MP.
She said he confronted her as she went to sit in the members area on the terrace.
She wrote: "He actually said to me, 'What are you doing here? This is for members only'.
"He then proceeded to ask me, 'Are you a member?'.
"And I said, 'Yes I am, are you?' And he turned around and said to his colleague, 'They're letting anybody in nowadays'.
"This man could not equate the image he saw in front of him with that of an MP. It was quite upsetting for my team and so we had to take it further."
At the time, Mr Heathcote-Amory denied that his remarks to Ms Butler were racist and said that he had not recognised her as a new MP.