The 39-minute episode of "This American Life," which is distributed by Public Radio International, featured Mike Daisey, a monologist who recounted his visits to Foxconn factories in China and the abuses he encountered there.
Mr Daisey is the author of the one-man show "The Agony and Ecstasy of Steve Jobs," and the episode aired by This American Life was an excerpt from the show, which has been performed to packed audiences around the country.
This American Life executive producer Ira Glass said the episode was being retracted.
"We've learned that Mike Daisey's story about Apple in China -- which we broadcast in January -- contained significant fabrications," Mr Glass said in a statement. "We're retracting the story because we can't vouch for its truth."
Mr Glass said Mr Daisey's interpreter during his visit to Shenzhen in southern China had "disputed much of what Daisey has been saying on stage and on our show."
"Daisey lied to me and to This American Life producer Brian Reed during the fact checking we did on the story," Glass said. "That doesn't excuse the fact that we never should've put this on the air.
"In the end, this was our mistake."
This American Life said it will broadcast a programme detailing the errors in the story, "Mr. Daisey and the Apple Factory," the show's most popular podcast ever with 888,000 downloads.
"Some of the falsehoods found in Daisey's monologue are small ones: the number of factories Daisey visited in China, for instance, and the number of workers he spoke with," This American Life said. "Others are large.
"In his monologue he claims to have met a group of workers who were poisoned on an iPhone assembly line by a chemical called n-hexane," it said. "Apple's audits of its suppliers show that an incident like this occurred in a factory in China, but the factory wasn't located in Shenzhen, where Daisey visited."
In a statement on his blog, Mr Daisey said "I stand by my work."
"My show is a theatrical piece whose goal is to create a human connection between our gorgeous devices and the brutal circumstances from which they emerge," he said. "It uses a combination of fact, memoir, and dramatic license to tell its story, and I believe it does so with integrity.
"What I do is not journalism," Mr Daisey said. "The tools of the theater are not the same as the tools of journalism. For this reason, I regret that I allowed This American Life to air an excerpt from my monologue," he said.
"This American Life is essentially a journalistic, not a theatrical, enterprise, and as such it operates under a different set of rules and expectations," he said.
"But this is my only regret," Mr Daisey continued. "I am proud that my work seems to have sparked a growing storm of attention and concern over the often appalling conditions under which many of the high-tech products we love so much are assembled in China."
Apple has repeatedly said it seeks to provide a safe working environment for workers in China and agreed in January to allow inspections of Foxconn plants by the Fair Labor Association.
The retraction of the This American Life report came on the same day as the new iPad went on sale around the world.
Protestors motivated by the reports of abuses at Foxconn factories in China staged demonstrations outside Apple stores in New York, San Francisco and other cities.
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