His withdrawal, almost five months before the first primary, is one of the most spectacular flameouts in the annals of modern presidential politics.
But his exit will have little impact on the course of the '96 contest, predicted Republican politicians, because he had failed gain much support around the country.
In announcing his decision to a crowd of backers in Sacramento, Calif., the 61-year-old governor cited a shortage of campaign cash to explain his departure from the race a month and a day after he formally entered it.
"To go on would simply be to run up an unacceptable debt," said Mr. Wilson, his voice still raspy from the minor throat surgery last spring that silenced him for weeks and became the first of many problems that would undermine his candidacy.
Aides said the campaign was roughly $1 million in debt at the end, despite having raised almost $6 million over the past six months. They added that fund raising had all but dried up this month because of the governor's poor showing in the polls and widespread news reports of infighting among Mr. Wilson's top ++ advisers.
A shrewd, disciplined campaigner, with a reputation as a brilliant political tactician, Mr. Wilson never made the transition to presidential politics.
His hard-line campaign message -- focused around themes of racial preferences, illegal immigration and crime -- did not seem to be connecting with Republican voters. A recent national poll showed him stuck in the middle of the GOP pack, with support from just 6 percent of likely primary voters.
In New Hampshire, the first primary state, where his TV commercials had been airing for three weeks, Mr. Wilson appeared to be going nowhere. The latest statewide poll showed him to be among the best-known candidates in the race, but the choice of only 4 percent of Republican voters.
Known as a social moderate throughout his career, he was widely criticized for shifting his positions to appeal to conservative activists who play a leading role in GOP presidential politics. He was also hampered by his responsibilities as California governor, which limited his ability to campaign around the country.
Most of the 10 remaining GOP candidates were quick to issue claims that Mr. Wilson's departure would boost their chances.
Sen. Bob Dole of Kansas, who leads in the polls and stands to benefit any time the field shrinks, will now start devoting resources to California, his aides said. Sen. Phil Gramm of Texas, who was already competing there, boasted that more California congressmen are supporting him than any other candidate.
Lamar Alexander of Tennessee noted that he stands to gain as the only Washington outsider left in the race with experience as a state governor. And Sen. Arlen Specter of Pennsylvania pointed out that he is the lone GOP candidate who supports abortion rights.
Mr. Wilson's campaign chairman, Craig Fuller, said the governor simply didn't have the resources to compete in a field that includes "a very strong front-runner" in Mr. Dole and "a very strong not-yet-runner," a reference to retired Gen. Colin L. Powell.
The calls for Mr. Powell, a moderate, to enter the GOP race are likely to intensify now that Mr. Wilson is out, predicted Charles Black, the Gramm campaign's manager.
In their postmortems, Wilson aides, who spoke on the condition they not be identified, blamed the campaign's demise on the governor's inexperience in presidential politics, misjudgments by him and his small cadre of California advisers, and bad luck.
"The lesson is that experience counts in national politics," said one adviser.
Mr. Wilson's announcement earlier this month that he would not contest the Iowa caucuses in February, the first stop on the '96 trail, may have been the final blunder. It raised serious doubts about his credibility as a national candidate.
But the seeds of his campaign's demise may have been planted in 1994, when he promised California voters that he would not seek the presidency if they re-elected him last fall.
In his run for the presidency, Bill Clinton succeeded in making, and breaking, a similar pledge to home-state voters in Arkansas. Mr. Wilson was not so fortunate. California Republicans reacted bitterly to his decision last winter to form an exploratory presidential campaign, and the governor's throat problems at the time hampered his ability to explain what he was doing, aides said.
His political problems at home were reflected in well-publicized polls, which showed him trailing Mr. Dole in California. In a classic downward political spiral, the negative publicity further undercut his fund-raising efforts.
"The amount you raise is a reflection of how well your candidacy is doing," said a senior Wilson aide, revealing the campaign's demise was hastened by a failure to trim spending when the money failed to come in as projected.
A winner of four statewide campaigns in the past dozen years, Mr. Wilson was considered the premier California politician of the '90s. Early on, Clinton advisers regarded him as the most dangerous Republican they could face next year, and in that sense, his withdrawal comes as good news to the White House.
Clinton strategists have acknowledged that the president cannot win re-election without carrying California, and a popular, socially moderate Republican from that state would have been a formidable foe. Mr. Wilson promoted the idea that he was the candidate Mr. Clinton feared the most, using the line in his formal announcement speech at New York harbor last month.
Mr. Wilson's announcement yesterday came as a surprise, even though it was clear that his candidacy was in deep trouble.
"Are you sure?" responded Mr. Clinton, when reporters asked him what he thought about Mr. Wilson's decision.
Political veterans said they could not remember another major presidential candidate pulling out of the race this early, absent a scandal; Gary Hart left the 1988 Democratic contest in 1987, amid charges of marital infidelity, then re-entered before the primaries began.
"This is really spectacularly soon in its suddenness," said Thomas Rath, a senior strategist in the Alexander campaign.