"None of my MPs beat people up with a bed leg," Mr Hipkins said in Thursday's final debate, broadcast by TVNZ to an estimated audience of a million New Zealanders.
The jaw-on-the-floor moment came after Mr Luxon attacked the Labour leader for ministerial exits during his tenure.
Mr Hipkins' reply referred to National's Tauranga MP Sam Uffindell, who admitted responsibility for a savage boarding house beating in his youth, which was only revealed after his election.
An awkward silence followed and members of the audience gasped.
After the debate, Mr Luxon called it "a low blow".
"It was emblematic of the negativity and the personal attacks that we've seen over the course of this campaign and as you can see, I didn't dignify it with a response," he said.
Mr Hipkins said he was within his rights given he was being challenged on the conduct of his MPs.
"If you're going to live in a glass house, you shouldn't throw stones," he said.
Despite the shocking revelations, Mr Luxon has stood by Mr Uffindell, who is likely to retain his safe National seat at Saturday's election.
Mr Hipkins' pit-bull approach to the debate echoed his attacks throughout the campaign during which he has tried to paint Mr Luxon as inexperienced, divisive and economically illiterate.
National leader Chris Luxon (left) has stood by Sam Uffindell, who is expected to retain his seat.
The debate traversed the campaign's key issues - the cost of living and tax plans, coalition dynamics, inequality, and the Labour government's record.
Mr Luxon quoted Taylor Swift at one point, attempting to lower the temperature during the exchange.
"Mate, listen, you need to listen to Taylor Swift when she says 'I need you to calm down' right?" he said.
His plea fell on deaf ears.
"I'm not going to calm down about you cutting benefits," Mr Hipkins said, referencing the National party's plan to save $NZ2 billion ($A1.9 billion) in welfare.
"You're going to put thousands more children in poverty.
"Your moral compass is gone."
In another eye-opening moment, Mr Luxon said he spent just $NZ60 ($A56) on his weekly two-person food shop, while Mr Hipkins said he spent $NZ300 ($A280).
That comment is likely to reinforce beliefs in the electorate that Mr Luxon, a former Air New Zealand chief executive who owns seven homes, is out of touch.
Mr Luxon was also lambasted for promising a trade deal with India in his first term of government.
"India are saying that they won't commit to one with New Zealand ... that is a promise you will not be able to deliver on," Mr Hipkins said.
The tit-for-tat continued throughout the 60-minute debate, with the leaders often talking over moderator Jessica Mutch-McKay to try and have the last word.
"I'm not even sure that you guys need me at this point," TVNZ political editor Ms Mutch-McKay said.
Mr Hipkins' hyped-up performance comes as Labour attempts to claw back a polling deficit 48 hours before the last ballots are cast.
Labour has received a small bump in recent surveys but it has been months since a single poll indicated Labour could win a third term at Saturday's election.
