Ann Maria Burke admitted she made the remark to dentist Savita in University Hospital Galway just days before she died after giving birth.
According to Irish media reports, the senior midwife said she had been trying to explain the law of the land after the 31-year-old said she was a Hindu and she would have ended her pregnancy in her home country.
"I did mention it's a Catholic country," Burke told Galway coroner Dr Ciaran MacLoughlin. "I didn't mention it in a hurtful context. It was in a conversation we had."
She added, "I'm sorry that I said it." Halappanavar was 17 weeks pregnant when she was admitted to the hospital in pain on October 21 last year. She delivered a dead baby girl three days later and was rushed to intensive care within hours of the delivery, where she remained in a critical condition.
On October 28, Savita died of a heart attack caused by septicaemia - an infection in the blood. The case reignited debates on abortion in Ireland, with her death sparking rallies and protests calling for a change in the law.
The inquest, in its third day, has heard claims that Katherine Astbury, a consultant obstetrician, also made the "Catholic" remark to Halappanavar and her husband Praveen.
Astbury denied using the phrase, but she admitted there were system failures in her care and also warned of a lack of legal clarity for doctors treating pregnant women who suffer health risks.
She insisted that when she told the dentist she could not abort the baby, she told her, "In this country it is not legal to terminate a pregnancy on grounds of poor prognosis of the foetus."
She also referred to the Irish Medical Council guidelines on abortion which refer to terminating a pregnancy if there is an immediate threat to the mother's life. Asked by the coroner if there was confusion over the interpretation of the guidelines, she replied, "There's no law to tell you what you what is permitted or not permitted."
Dr Astbury also revealed she had been unaware of blood test abnormalities as they had not been passed on to her team from the weekend staff on-call. She also confirmed the patient's vital signs were not checked every four hours after her foetal membrane ruptured, which was a breach of hospital policy.