5:33 PM PT -- CBS says Memphis did not utter the n-word on the live feed.
The network tells TMZ ... "producers have listened to the scene using enhanced audio. Additionally, the Network’s program practices team isolated and played back the scene several different ways using professional, studio-grade audio equipment. After close examination, it has been determined a racial epithet was not said or uttered."
CBS adds ... "Hate speech will not be tolerated, and those who violate the policy will be removed from the Big Brother House."
A source connected to production tells us Memphis didn't say anything at all. Watch the video now -- we've removed the bleep -- and it looks like he said, "David's an ..." and then trailed off.
'Big Brother' fans are calling for houseguest Memphis Garrett to be removed from the competition after some say they heard him drop the n-word in reference to a Black competitor.
During the after-hours of the 'BB' live feed late Wednesday night ... Memphis was having a conversation with Cody Calafiore about David Alexander, who is Black. Many viewers, who reacted on social media, believe they heard Memphis say, "Dude, David's a n****r" before getting a hand signal from Cody to stop talking.
Another camera angle shows Memphis had a look on his face, right after the remark, seeming to realize he messed up big time.
A change.org petition is circulating to get Memphis removed from the show -- and it says, "If left unchecked, we could be witnessing real life harm from a privileged white a**hole upon a black man who is ALONE in the house, after almost all the other people of color have been evicted / threatened. THIS IS NOT OKAY!!!"
This isn't the first major controversy of this 'All-Star' season of the popular CBS reality show. Just last week, Memphis -- along with houseguests Christmas Abbott, Dani Briones and Nicole Franzel -- were caught mocking fellow houseguest Ian Terry over his autism.
Of course, bullying and bigotry have been causes for controversy many times on "Big Brother" ... the show has dealt with multiple racist and misogynist issues over the years.
We reached out to CBS about Garrett ... no word back so far.