Mr Ryan has hit back in a series of direct messages in what Senator Steele-John described as a "shocking and very concerning" development.
In two emails sent to Senator Steele-John, who has been vocal in calling for Mr Ryan to be dumped from the $527 million inquiry, Mr Ryan warned the Greens Senator to stop making defamatory comments.
"Clearly you aren’t interested in conducting this conversation graciously," Mr Ryan wrote in the email dated 27 July.
In a separate email, he highlighted errors made by Senator Steele-John in an interview with Sky News last week.
"You would not have to be a lawyer to work out that I would have considerable grounds to take legal action against you for the comments published on TV and republished by you on social media," he wrote.
"I don't plan to, of course. I have more important work to perform."
Senator Steele-John has admitted to naming the wrong people during the Sky interview when referring to two people that died under a program Mr Ryan delivered.
He said Mr Ryan's message was clear.
"Everybody knows when you put those words in an email then what you're trying to do is shut them up and shut them down and that's not the attitude we need here.
"You should never answer facts with intimidation."
He said Mr Ryan had also sent messages to other disability advocates raising concerns about a conflict of interest.
"He has responded to that by not acknowledging, by not listening and engaging in quite a combative way with many senior advocates around the country.
"The primary job of a royal commissioner in a situation like this is to listen to people, to listen to disabled people even when they're telling you things you don't like."
Government sticks by commissioners
Last week, the Senate voted to support a non-binding motion calling for the government to replace Mr Ryan and another former public servant Barbara Bennett, who oversaw the implementation of the National Disability Insurance Scheme.
Mr Ryan held a senior role in the NSW Department of Ageing, Disability and Home Care and oversaw the closure of large residential institutions in 2013 and moving people with disabilities into smaller group homes.
He declined to comment on Monday.
The government is resisting the pressure from the disability sector to dump the pair.
Minister for the National Disability Insurance Scheme Stuart Robert said the commissioners were well qualified.
"Mr Ryan and Ms Bennett were appointed because they have valuable contributions to make to the inquiry," Mr Robert told the inquiry.