Gaethje, 33, is set to face defending champion Charles Oliveira for the 155lb strap in the main event of UFC 274 on May 7 at the Footprint Center in Phoenix, Arizona.
The hugely-popular American has warned the Brazilian he will have to ‘walk through hell’ like Khabib Nurmagomedov to stand any chance of victory.
Fan favourite Diaz, 37, was quick to point out that Gaethje actually ‘got triangle choked from the mount’.
However, Gaethje wasn’t going to let those comments slide.
During the UFC 274 media day, he told MMA Junkie: “That m*********** has lost over 15 times, like, come on.
“So for him to be criticizing me for one loss, I found it funny, and I think he’s jealous because he’s done.
“He’ll never be here. He’ll never be fighting for a world championship. He’ll never achieve a world championship.
He added: “In the history books, I’m already a world champion.
“I don’t like it. I don’t accept it. I need to make it right on Saturday but I’ll be in the Hall of Fame.
“He should be, too, but just because the fans love him.”
Gaethje also claimed Diaz doesn’t have the power to knock someone out by ‘accident’ and accused the star of turning down the opportunity to fight Nurmagomedov multiple times.
He also said that he doesn’t stand a chance of beating Khamzat Chimaev.
“I heard he turned down Khabib about 20 times,” alleged Gaethje.
So for him to s*** on me for losing to Khabib, I find that hilarious. But if he’s fighting Khamzat next, then I have to give him some credit.
“Of course [I don’t think he’ll win]. But I’m a fan of the sport because anything can happen at any time. He’s not going to outwrestle him.
“He doesn’t even have the power to shut someone’s light out on accident. So, no. No chance. He has a zero percent chance – a one percent chance.”
Diaz, 37, has not fought since losing a unanimous decision to Leon Edwards in Glendale in June last year.
On the undercard, his sparring partner Anthony Taylor also lost to Chris Avila, a long-time team-mate of the Diaz’s.