Executive producer Greg Goodrich said the development team listened to feedback from friends and families of fallen soldiers who expressed concern over the game's option to let players fight as the Taliban.
"This is a voice that has earned the right to be listened to. It is a voice that we care deeply about," Goodrich said in a written statement. "Because of this, and because the heartbeat of 'Medal of Honor' has always resided in the reverence for American and Allied soldiers, we have decided to rename the opposing team."
Players still will be able to control the fighters -- which are the enemy when a player is playing the game alone -- but they will be referred to simply as "Opposing Force."
In recent months, British Secretary of State for Defence Liam Fox made headlines when he called for retail stores to ban the game.
He told London's Sunday Times that he was disgusted and angry and asked stores to show support for the military and military families by not selling "Medal of Honor."
"It is shocking that someone would think it acceptable to recreate the acts of the Taliban," Fox told the newspaper. "At the hands of the Taliban, children have lost fathers and wives have lost husbands."
The U.S. military's Army & Air Force Exchange Service had asked on-base stores not to stock "Medal of Honor."
"Out of respect to those we serve, we will not be stocking this game," said Maj. Gen. Bruce Casella, the service's commanding officer. "We regret any inconvenience this may cause authorized shoppers, but are optimistic that they will understand the sensitivity to the life and death scenarios this product presents as entertainment."
Jeff Brown, a spokesman for EA, said the controversy surprised the game publisher.
"The misunderstanding starts with people who don't understand the dynamics of video games," Brown said. "There are cops and robbers, good guys vs. bad guys, in nearly every game, and we were surprised to be reminded that not everyone gets that dynamic."