Two Romanians who featured in Borat are suing 20th Century Fox for $30m (£16m), claiming they and their neighbours were depicted as rapists and criminals.
They allege that people in Glod were told they would star in a factual film about their "extreme poverty".
Now they want to be edited out of all future screenings, according to a legal action filed in New York.
But a spokesman for the movie studio said Borat was "never presented to anyone in Romania as a documentary".
Village residents were paid above the usual rate and mixed with professional actors, Gregg Brilliant said.
"The village was used as a set to portray a fictional village in Kazakhstan. It was clearly a satire," he added.
Nicolae Todorache and Spiridom Ciorebea were among the residents used as stand-ins for Kazakhs in the film, in which Sacha Baron Cohen plays a Kazakh journalist travelling across the US.
The opening sequence - which supposedly portrays Borat's hometown - was shot in Glod.
Villager Paraschiva Stoian is seen playing the role of Borat's mother
The village is about 85 miles (137km) north-west of the Romanian capital, Bucharest.
The pair claim the project was intended to portray them and other villagers "as rapists, abortionists, prostitutes, thieves, racists, bigots, simpletons and/or boors".
Borat has been the number one film in the US and UK.
It has taken more than $90m (£47m) at American cinemas alone since its release at the start of the month.