The decision to end his bid for the White House came after poor third-place finishes in Virginia and Tennessee on Tuesday. Clark had only narrowly won a primary last week in neighbouring Oklahoma.
"Today I end my campaign for the presidency, but our party's campaign to change America is just beginning," Clark told supporters in his hometown of Little Rock.
Clark pledged to work for the Democratic challenger to President George Bush in November's presidential vote.
"Give them hell and never retreat," Clark said. ""I will do everything I can to make sure George Bush does not get away with playing politics with national security."
He called Democratic front-runner John Kerry and his other two main rivals, John Edwards and Howard Dean "good men, good Democrats and good patriots."
"It's not the end of the cause," Clark said.
Aides said Clark's decision to pull out was based on the difficulty in countering the momentum built by Kerry, a senator from Massachusetts, which has made it difficult to raise money.