The "Cuddle with Me" doll features an African-American baby that comes packaged with a plush monkey. A cap on the baby doll has the words "lil' monkey" on it.
Many parents expressed disbelief that the doll was being sold.
"Somewhere along the production line of this doll, whether it was in the store, at the manufacturer or somewhere, someone should have noticed that this was potentially going to be a problem," said Gendolyn Bookman, a concerned mother.
A Costco spokesman said he regrets that the product offended anyone.
The store said it's pulling the dolls from all of its stores.
Brass Key, the company that makes the toy, has also apologized, saying the offensive meaning was not within their company's "realm of thinking."
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