His decision, first reported by the Rocky Mountain News, makes him the 14th Republican to announce his retirement this election cycle.
"It's the fact that I really believe I have done all I can do in the House, especially about the issue about which I care greatly (immigration)," Tancredo told the Rocky Mountain News in a phone interview from Iowa.
His presidential campaign, mired in single-digits in the polls, has been focused primarily on fighting illegal immigration and securing the nation’s borders.
The five-term congressman has made a name in Congress by constantly clashing with the Bush administration and has alienated many Republicans in the process.
Karl Rove told him never to "darken the doorstep of the White House" after he loudly opposed the administration on comprehensive immigration reform in 2002.
Republicans will be strongly favored to hold Tancredo’s seat in a suburban Denver district has been reliably Republican, giving President Bush 60 percent of the vote in 2000 and 2004. Tancredo won 59 percent of the vote last year.