Speaking at an event to mark the Martin Luther King holiday in the U.S., Guadagno said the allegations by Hoboken Mayor Dawn Zimmer were "wholly and completely false."
Last weekend, the Democratic mayor ratcheted up her allegation about the funding link and said that she had turned over documents to a federal prosecutor investigating his staff.
Guadagno pushed back unequivocally against the accusations, which are part of broader political trouble dogging possible presidential aspirant Christie since he fired two aides in a bridge-traffic scandal two weeks ago.
"Frankly, I'm surprised that Mayor Zimmer has chosen to miscategorize a conversation I had with her about a project in Hoboken," Guadagno said in a news conference carried on CNN.
She wouldn't take questions and left the microphone immediately after.
On Saturday, Zimmer said Guadagno and a top community development official separately told her that recovery funds would flow to her city if she expedited the commercial development project by the New York-based Rockefeller Group.
On Sunday, she went a step further and said on CNN's State of the Union with Candy Crowley that Guadagno told her the request "was a direct message from the governor.
"The lieutenant-governor pulled me aside and said, essentially, 'You've got to move forward with the Rockefeller project. This project is really important to the governor.' And she said that she had been with him on Friday night and that this was a direct message from the governor," Zimmer recalled Guadagno saying.
Zimmer says she'll testify under oath
Christie spokesman Colin Reed issued a statement Sunday, saying, "Mayor Zimmer's categorization about her conversation in Hoboken is categorically false."
Zimmer said in a statement Sunday night that she will "provide any requested information and testify under oath about the facts of what happened when the lieutenant governor came to Hoboken and told me that Sandy aid would be contingent on moving forward with a private development project."
Hoboken, a low-lying city of 50,000 across from Manhattan, was nearly swallowed by the Hudson River during Sandy, with three of its electrical substations and most of its firehouses flooded, businesses and homes submerged, the train station inundated with water, and people trapped in highrises because elevators didn't work and lobbies were underwater.
Zimmer has proposed a comprehensive flood mitigation plan and has applied for $100 million US in grants to help make it happen.