Furious Bees fans demanded the club punish their star striker over the video, which went viral on social media.
Brentford have launched a probe, with a club spokesman confirming: “We’re aware and investigating.”
The £30million-rated forward is currently in Dubai with team-mate Bryan Mbeumo during the Premier League's winter break.
Toney, 25, appears shirtless in a Snapchat clip alongside a girl who first shouts the X-rated phrase into the camera.
The camera then turns to Toney, where he puts two fingers up before repeating the slur.
The woman then says it one more time before laughing and ending the clip.
A caption over the top of the clip reads: “Ivan Toney moving mad looool.”
The striker, who joined the club in 2020, is the top scorer in Thomas Frank’s squad this season with seven goals in all competitions.
He has netted in each of the last two Premier League matches - in the 3-1 loss to Manchester United and 2-1 defeat to Wolves.
He had helped fire Brentford to the top flight after scoring 31 goals last season.
Speaking after the Wolves game, Toney had said his side need to use the international break to “reset”.
He said: "I feel there’s something we can take out of the game, we have to look forward now and try to change it in the next game.
"On a personal note it was another one for the tally but it’s much sweeter when there’s three points behind it.
"It’s time to reset. Obviously we’re on a bad run, we know that. But it’s not like we’ve been playing badly, we’re just conceding silly goals.
"If we cut that out we’ve got a great chance. It’s time to restart and go again."