The legendary singer was performing the late pop legend's track 'The Way You Make Me Feel' when he broke down with his head in his hands.
Stevie - a close friend of Michael, who passed away in June - did, however, manage to finish his performance alongside soul singer John Legend, and was given a standing ovation from the audience at the Rock and Roll 25th Hall of Fame Anniversary Concert, broadcast by US network HBO.
Meanwhile, Stevie - who is blind - has also been named a United Nations (U.N.) Messenger of Peace, for his philanthropic work which includes working with charities such as the US President's Committee on Employment of People with Disabilities, the Children's Diabetes Foundation and Junior Blind of America.
Stevie, 59, was selected for the position by UN Secretary-General Ban Ki-moon and is the 11th person to be given the honour.
Ban Ki-moon said: "Our newest Messenger of Peace is someone who is admired by millions of people and has given back to millions of people."