The 60-second ad, which some claim describes Kerry as a traitor, came under fire from Republican senator John McCain who also served in Vietnam and was a prisoner of war for several years.
McCain called the ad "dishonest and dishonourable" and urged the Bush administration to condemn it, but the White House declined, according to the Associated Press.
McCain told AP that he was subjected to the same kind of misinformation when he ran against President George Bush in the 2000 Republican primaries.
The ad was financed by a group calling itself Swift Boat Veterans for Truth.
Kerry "a liar"?
During the ad, viewers hear and see several Vietnam vets claim that Kerry lied to get his Purple Heart and Bronze Star military awards.
One lieutenant who served in Vietnam accuses Kerry of betraying the men and women of the armed forces by speaking out against the war when he was returned stateside.
The Kerry campaign fired back by saying none of the people quoted and/or interviewed in the ad ever served with Kerry when he was in charge of what is termed a 'swift boat' along the Mekong Delta in 1969.
"I deplore this kind of politics," McCain told AP.
"I think the ad is dishonest and dishonorable. As it is, none of these individuals served on the boat (Kerry) commanded. Many of his crew have testified to his courage under fire. I think John Kerry served honorably in Vietnam. I think George Bush served honorably in the Texas Air National Guard during the Vietnam War."