The "X-Men: Apocalypse" star is among the new castmembers of the follow-up to the 2017 horror remake, which focused on a group of youngsters being terrorised by an evil clown called Pennywise, who was brought to life onscreen by Skarsgard.
"It: Chapter 2" will follow the now grown-up kids as they return to their Maine hometown 27 years later and have to face Pennywise once again.
McAvoy was cast to play the older version of Bill, portrayed by Jaeden Lieberher in the first installment, and even though he became friendly with Skarsgard in between scenes, the Scottish actor admits simply sharing the same room as him sent a chill up his spine.
"He is amazing," James said on U.S. breakfast show "Good Morning America". "The guy who plays the clown is terrifying! He's a lovely guy, and yet he really freaked me out."
And McAvoy insists he wasn't the only one to feel a little unnerved around Skarsgard, especially when he was in costume.
He recalled, "I remember standing there with the rest of the cast, all these adults, we've all done weird, freaky stuff, and we are all looking at each other going, 'I don't like being in here. I don't like being an actor today. This is really (creepy)...'.
"It really freaked me out. I never liked clowns as a kid...".
It director Andy Muschietti returned to take charge of the sequel, which was written by Gary Dauberman, and based on the Stephen King 1986 novel of the same name.