The organization's legal counsel, Dennis Hayes, will serve as interim president while a national search is conducted.
"For the last nine years, I've had what I believe is both the honor and the privilege to help revive and to help restore this great organization, which has ... really become an American institution," Mfume said.
He said he wanted to spend more time with his family. "I just need a break. I need a vacation," he said. "I'm just not going to do anything for a while.
"In my heart of hearts, I know the job has been done, and I step aside willingly ... to find another challenge and another chance to make a real difference," he said.
Mfume, 56, has been president of the National Association for the Advancement of Colored People since 1996. Before that, he was a congressman for nine years and that "other challenge" may be a run for the Senate.
"A lot of it depends on whether Paul Sarbanes runs again — there's some talk that he might not run again; he hasn't committed — and that would leave the way clear for another Democrat like Mfume," said Page.
Sarbanes, a Democrat, is 71. His term expires in 2006.
Mfume is credited with steering the organization into an era of stability and growth with corporate-style management techniques, including cost-saving layoffs.
"When he came into the organization, it was suffering terrible financial and organizational problems. They were over $3 million in debt, down to a skeleton staff," Chicago Tribune syndicated columnist Clarence Page told CBS Radio News.
Last month, the organization's chairman, Julian Bond, announced that its tax-exempt status is under review by the government in an investigation he contends stems from a speech he gave that criticized President Bush. Bond said IRS agents were investigating his keynote address July 11 at the NAACP's annual convention in Philadelphia.
For an organization to keep its tax-exempt status, "leaders cannot make partisan comments in official organization publications or at official organizational functions," according to an Oct. 8 letter to the NAACP from the IRS office in Louisville, Ky.
In September, the group launched an advertising campaign aimed at combating what officials describe as stagnant membership growth. The civil rights group, founded in 1909, wants to increase membership by 20 percent, Mfume said at the time.
The group claims 500,000 members, but it has not seen significant membership growth in recent years.
Mfume, whose adopted West African name translates to "conquering son of kings" and is pronounced Kwah-EE-see Oom-FOO-may was born Frizzell Gray in Baltimore in 1948. He began his career as a dashiki-clad popular radio talk show host and political activist in the 1970s and transformed himself into one of the nation's foremost civil rights leaders.
"He was always well-known in the Congressional Black Caucus and a very outspoken figure and yet, not one who was a barn-burner or a bomb thrower," said Page.
He served on the Baltimore City Council from 1979-1987 before winning a closely fought race to represent Baltimore's 7th district in the House of Representatives. Mfume was elected to four more terms in Congress and was leader of the Congressional Black Caucus before stepping down to head the NAACP.
"To serve as the president of the NAACP ... clearly has been the most rewarding and the most fulfilling experience in my life," Mfume said. "I walk away with more rather than less."