North Carolina Governor Pat McCrory has signed an executive order in response to concerns about a controversial new state law amid accusations it is discriminatory.
However, the Republican stood firm on a provision restricting transgender bathroom access.
The governor's order adds anti-discrimination protections based on sexual orientation and gender identity for state employees.
McCrory also asked lawmakers to restore the right to sue in state court for discrimination.
"I have come to the conclusion that there is a great deal of misinformation, misinterpretation, confusion, a lot of passion and frankly, selective outrage and hypocrisy, especially against the great state of North Carolina," McCrory said in a statement.
"Based upon this feedback, I am taking action to affirm and improve the state's commitment to privacy and equality."
The move came after Deutsche Bank announced it was freezing plans to create 250 new jobs in North Carolina after the state enacted a law last month that bars transgender people from using bathrooms or locker rooms in schools and other public facilities that do not match the sex on their birth certificate.
Last week, PayPal Holdings cancelled plans to open a global operations centre in Charlotte, North Carolina, and invest $US3.6 million in the area and rock star Bruce Springsteen called off a concert in the state to protest the law.