"There are so many other issues we need to move on to and deal with that are taking our time and energy," American Family Association president Tim Wildmon wrote in a letter published Monday on the group's Web site.
"If you're going to call for a boycott of a company - if something has become that serious - you need to have all your resources behind it."
The boycott had a limited impact. Disney has reported higher earnings, citing increased attendance at its theme parks and strong performance from its film studio and ABC television network.
The Tupelo-based Christian group has protested Disney's extension of benefits to domestic partners of gay employees, promotion of gay-related events at its theme parks and violent and sex-filled content of movies made by its Miramax subsidiary.
The group blamed longtime Disney chief executive Michael Eisner, and said some of the problems had been resolved by Eisner's upcoming retirement and the company's break with Miramax founders Bob and Harvey Weinstein.
Wildmon said the announcement is not an endorsement of Disney, just an end to the boycott "as a ministry agenda item."