The 66-year-old praised Oscar-nominated cowboy love story Brokeback Mountain for its homosexual agenda, but maintains Hollywood needs to examine its views on sexual equality and take an example from the accepting attitudes on Broadway in New York.
Speaking at the Berlin Film Festival on Saturday, where he received a lifetime achievement award, McKellen says, "The film industry is very old fashioned in California. It is very, very, very difficult for an American actor who wants a film career to be open about his sexuality. And even more difficult for a woman if she's lesbian.
"It's very distressing to me that that should be the case.
"It's not true of actors on the other side of the American continent, on Broadway, where people are very at ease with being open and honest."