He said he has used the term many times on the air to refer to McCain because of his support for the war in Iraq.
"He voted for this war. He's a perpetrator of the war. He's an advocate of the war," Schultz said. "In my personal definition, that's a warmonger."
Obama was not in the room when Schultz spoke. The candidate spoke after a series of introductions by the state's three Democrats in Congress.
Obama thanked Schultz and called him "the voice of progressive radio."
But on Saturday, Obama campaign spokeswoman Jen Psaki said in a statement: "John McCain is not a warmonger and should not be described as such. He's a supporter of a war that Senator Obama believes should have never been authorized and never been waged."
At a campaign appearance in Arizona Saturday, McCain said Obama should condemn Schultz's use of warmonger.
"I would hope that in keeping with his commitment that Senator Obama would condemn such language, since it was part of his campaign," McCain said.
"That kind of language is unnecessary," he said.
Jamie Selzler, director of the North Dakota Democratic Party, defended Schultz. "I'm not going to criticize Ed Schultz. He gave a rousing speech that got the group excited and we appreciated that he did that," Selzler said.
The roles were reversed in February, when McCain quickly condemned the anti-Obama remarks of conservative talk radio host Bill Cunningham when he spoke at a McCain campaign rally. Cunningham referred repeatedly to Obama using his full name - Barack Hussein Obama - and called him a "hack, Chicago-style" politician.
