The international development secretary admitted that he had sampled the class A drug at a wedding but it had “no effect” on him because he was walking up to 30 miles a day.
Mr Stewart, a former tutor to Princes William and Harry, has travelled extensively in the Middle East and wrote a successful book on his solo walk across Afghanistan in 2002.
He has emerged as the outside candidate in the race to succeed Theresa May, who announced she would stand down as Tory leader in June.
Boris Johnson is widely regarded as the frontrunner in the 11-strong contest, but Mr Stewart has attracted interest by touring the country to speak to the public.
In an interview with The Telegraph, Mr Stewart admitted consuming the drug, saying: “I was invited into the house, the opium pipe was passed around at a wedding.
“I thought, this is going be a very strange afternoon to walk – but it may be that the family was so poor they put very little opium in the pipe.”
When pressed on the issue, Mr Stewart admitted that it was against the law in the country at the time when he took it.
“I think it was a very stupid mistake and I did it 15 years ago, and I actually went on in Iran to see the damage that opium was doing to communities,” Mr Stewart told Sky News.
“I’ve seen it as a prisons minister. It was something that was very wrong, I made a stupid mistake.
“I was at a wedding in a large community meeting and somebody passed this pipe around the room and I smoked it – I shouldn’t have done, I was wrong.”
His admission came days after his rival in the leadership contest, Jeremy Hunt, said he had drunk a cannabis lassi while backpacking across India.
Mr Stewart, who previously served as a governor in Iraq, has spent the parliamentary recess taking to the streets with his selfie stick to answer questions from the public.
Appearing in Wigan, Barking, Kew Gardens and Lewisham Market, the cabinet minister took to Twitter to announce his presence and invited anyone who wanted to meet him to come along.
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