Honda said it recalled about 2,033,000 vehicles which were produced between August 2000 and December 2005, including more than one million in North America and 668,000 in Japan.
Two other automakers -- Mazda and Nissan -- also recalled hundreds of thousands of vehicles over the same problem, which was also responsible for earlier recalls by Toyota.
Japan's Takata Corp, which made the airbag, noted its US subsidiary had manufactured the airbag, apologising for the problem and vowing to make its utmost efforts to prevent a recurrence.
Nissan recalled a combined 755,000 vehicles, including 128,000 in Japan and 627,000 overseas.
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"In North America, 228,000 are on the recall list, with 7,000 in China," a Nissan spokesman said.
A Mazda spokeswoman said: "The recall will cover 11,832 vehicles at home and 147,975 units overseas, mainly in Europe and China."
Subject to Honda's recall are a total of 13 types of vehicles in Japan including popular Fit and Accord models.
Front passenger airbag inflators could have been assembled with an improperly manufactured propellant component, Japan's third largest automaker said.
The same problem has also caused top automaker Toyota to recall millions of vehicles globally.
Toyota has earlier said it acted as it received a complaint from a Japanese customer who said his passenger seat was burned from the defect.
Honda said the company had received no complaint or reports of injuries on its own.
Honda shares closed down 0.63 per cent at 3,602 yen on the Tokyo Stock Exchange while Takata soared 2.87 per cent to 2,111 yen.