Greg Joswiak, Apple's IPod marketing vice president, said it was responding to "increased attention in this area".
He said: "We want to offer customers an easy to use option to set their own personal volume limit."
Legal claim
The update is available for the iPod Nano and models with video playback capabilities.
It lets parents set a maximum volume limit on a child's iPod and lock it with a combination code.
Earlier this month, the US National Institutes of Health said new studies were needed into the effects of in-ear headphones.
It was responding to calls by a US congressman into the possible long-term effects of loud music on hearing.
John Kiel Patterson, of Louisiana, is suing Apple in the US District Court in San Jose, California.
He says his iPod is capable of generating more than 115 decibels, a dangerous noise level, and is not safe for prolonged use.
