The US president had previously suggested that the Queen had helped the US celebrate its bicentenary in 1776, before quickly correcting himself and adding two centuries to the date.
But the Queen, who was seen giving Mr Bush a withering look after the lapse, returned the favour by making Mr Bush the butt of a playful swipe.
"I wondered whether I should start this toast by saying, 'When I was here in 1776...'" she said.
The quip was met with uproarious laughter from the assembled guests and Mr Bush admitted he was beaten.
"Your Majesty, I can't top that one," he responded.
On a more serious note, the Queen paid tribute to the role the US had in helping bring about the historic events which occurred in Northern Ireland earlier in the day.
Devolution was restored to the province yesterday with formerly bitter opponents Ian Paisley of the Democratic Unionist party (DUP) and Sinn Fein's Martin McGuinness taking the positions of first minister and deputy first minister respectively.
"I would also like to take this opportunity, on the day that has seen the formal transfer of power to the devolved Northern Ireland government, to thank you and your predecessors for your contribution to bringing peace in Northern Ireland," the Queen said in her speech.
The Queen has spent five days travelling across the US with the Duke of Edinburgh and has visited Virginia to mark the 400th anniversary of the Jamestown settlement, the Kentucky Derby and the Nasa Goddard Space Flight Centre.
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