During a segment about Stella McCartney, co-host Meredith Vieira handed some underwear that McCartney had designed to Lauer.
After the pair joked about the knickers, Vieira asked to take them back, prompting Lauer to say: "No, no, no, they're mine - don't be an Indian giver."
The term "Indian giver" refers to someone who gives a present and then wants it back, and is offensive to Native Americans.
Viewers later took to Twitter to complain about Lauer's use of the term, with one user writing: "Can't believe people still think this term is acceptable! Kinda shocked."
Other posters called for Lauer to apologise, while one member wrote: "U just insulted every native American Shame on U & the rest of the NBC & @thetodayshow"
Reality star Kris Jenner was criticised for using the term "Indian giver" last year, while Jessica Simpson sparked outrage when she used the phrase in 2009.
Watch Matt Lauer on Today below: