iris$Species[iris$Species == 'virginica'] <- 'setosa'

levels(iris$Species)
# [1] "setosa"     "versicolor" "virginica"

iris$Species[iris$Species == 'virginica'] <- 'setosa'

iris$Species[iris$Species == 'virginica'] <- 'new.species'
# Warning message:
# In `[<-.factor`(`*tmp*`, iris$Species == "virginica", value = c(1L,  :
#   invalid factor level, NAs generated

levels(iris$Species) <- c(levels(iris$Species), "new.species")
iris$Species[iris$Species == 'virginica'] <- 'new.species'

levels(iris$Species)[3] <- 'new'

data(iris)
 library(plyr)
 revalue(iris$Species, c("virginica" = "setosa")) -> iris$Species