O'Reilly's show lost about 90 advertisers after The New York Times reported earlier this month five women were paid $13 million to settle sexual harassment suits.
While he said he didn't want to "publicly gloat" about O'Reilly's dismissal from Fox News, Colbert kept his celebration hidden - by having the Late Show with Stephen Colbert camera pan away for more than 20 seconds as the audience cheered on Wednesday night.
Stephen Colbert morphed into his alter ego "Stephen Colbert" to say goodbye to ousted Fox News host Bill O'Reilly.
"Hello nation, and shame on you", Colbert said as his character. "I'm sure the oak tree said some disturbing things about young black men with their rap music and their neck tattoos, but damn it the tree had been there forever".
The former Colbert Report host continued to lament the state of the country - "Suddenly sexual harassment's a crime?" - and slyly mock O'Reilly's one-dimensional persona: "When I first saw Bill on TV, I knew that no one could possibly sustain such a broad character for that long".
Stepping back into his role as Late Show host, Colbert appeased O'Reilly fans who may be upset about his dismissal.
The comment came just hours after the network announced Wednesday O'Reilly would not return to his show in the wake of sexual harassment allegations.
Colbert's persona then closed by saying, "Stay strong, Papa Bear", before bursting into tears.