McCain and the Republican National Committee also launched new Web and TV ads about Obama and Ayers.
Loud cheers from 4,000 people gathered at a sports complex near Milwaukee greeted McCain's attacks over Ayers, who helped found the Weather Underground, a Vietnam protest group that bombed government buildings 40 years ago. Obama has noted that he was a child at the time and first met Ayers and his wife, ex-radical Bernadine Dohrn, a quarter-century later.
"Look, we don't care about an old, washed-up terrorist and his wife," McCain said. "That's not the point here."
"He's a terrorist!" a man in the audience screamed without making clear to whom he was referring.
"We need to know the full extent of the relationship," McCain replied. Later, McCain told ABC News: "It's a factor about Sen. Obama's candor and truthfulness with the American people."
Obama has denounced Ayers and his violent actions and views. He dismisses McCain's criticism as an effort to "score cheap political points."
The Associated Press and other news organizations have reported that Obama and Ayers, now a college professor who lives in Obama's Chicago neighborhood, are not close but that they worked together on two nonprofit organizations from the mid-1990s to 2002. In addition, Ayers hosted a small meet-the-candidate event for Obama in 1995 as he first ran for the state Senate.
David Axelrod, a senior campaign adviser, says Obama, who was a child living in Indonesia and Hawaii in the late 1960s and early 1970s, was not aware of Ayers' radical past at the time of that campaign event. Some McCain supporters have expressed skepticism about that.
Some of those at the rally questioned why McCain was trailing Obama and why no one was talking about Obama's past associations.
Obama's history with Ayers was explored during the primaries in news reports and in a campaign debate. The GOP campaign has resurrected it as the economic crisis deepened in recent days.
Responding to McCain's criticism, Obama campaign spokesman Tommy Vietor said: "It's now clear that John McCain would rather launch angry, personal attacks than talk about the economy or defend his risky bailout scheme that hands over billions in taxpayer dollars to the same irresponsible Wall Street banks and lenders that got us into this mess, a scheme that guarantees taxpayers will lose money."
One person at the rally here suggested McCain get tougher in his final debate with Obama next Wednesday: "I am begging you, sir."
"Yes, I'll do that," McCain said.
To press its argument, the McCain campaign also released a 90-second Web ad about Obama and Ayers.
"Barack Obama and domestic terrorist Bill Ayers. Friends. They've worked together for years," the ad says. The ad also claims that one of the nonprofits on which Obama and Ayers worked was a radical education foundation.
That educational foundation was The Annenberg Challenge. It was funded by the Annenberg Foundation, a charity set up by longtime Republican backer and newspaper publisher Walter Annenberg. Annenberg has died, but his wife has endorsed McCain this year. For his work on this educational project, Chicago gave Ayers its "Citizen of the Year" award in 1997.
On Friday, the Republican National Committee will start running a TV ad in Indiana and Wisconsin that links Obama to Ayers and other Chicago figures. "The Chicago Way. Shady politics. That's Barack Obama's training," the ad says.
McCain and his campaign have sought to raise doubts about Obama, who could become the nation's first black president. Supporters have used Obama's middle name, Hussein, during introductions of McCain and his running mate, Alaska Gov. Sarah Palin this week - trying to remind voters that he shares a name with deposed Iraqi leader Saddam Hussein.
The Obama campaign denounced the move, which also plays to Internet rumors that Obama is a Muslim, even though he grew up in a secular household and is a Christian. After the fact, the McCain campaign said in an e-mailed statement that it did not condone using the middle name.
Palin joined McCain at the town hall - the first of two events in this swing state with 10 electoral votes - and blamed "mainstream media" for not asking Obama tough questions about his proposals.
"Are Americans having an opportunity to ask all the questions and are we receiving straight answers from our opponent?" Palin asked. The crowd shouted, "No!"
In a response for the Obama campaign, Wisconsin Gov. Jim Doyle said it was preposterous to suggest Obama hadn't been scrutinized during one of the toughest primaries and general elections in modern history.
McCain also repeated the false claim that Palin opposed the so-called Bridge to Nowhere, for which she campaigned in her race for governor and accepted federal money to build. When the project drew national scorn as an example of wasteful spending, Congress withdrew its support for the bridge but Alaska kept the money for other projects.
A poll released Wednesday by WISC-TV in Madison showed McCain trailing Obama by 10 points, the Arizona senator's largest deficit in Wisconsin since July when polls also showed Obama with a double-digit lead.
"Do you know how many times the political pundits in the last two years have written off my campaign?" McCain asked. He later repeated the line at an airport rally in Mosinee. Palin had flown to Cincinnati.
Associated Press writer Scott Bauer contributed to this report.