In the race, the horse was beaten 14 lengths by Cigar.
"After the Gold Cup, he was very uncomfortable," said trainer D. Wayne Lukas. "We had X-rays taken and discovered he has a condylar fracture. We've seen him run all year and knew that that was not the Thunder Gulch we knew."
Owner Michael Tabor said: "Obviously, I'm shellshocked. I had hoped to run him as a 4-year-old. I think the public really enjoyed watching him run. But I think this is the right thing to do."
Thunder Gulch will stand at stud at Ashford Stud in Versailles, Ky.
Thunder Gulch, a son of Gulch-Line of Thunder, won nine of 16 career races and earned $2,915,086. Besides winning two Triple Crown races, the colt won the Travers Stakes at Saratoga. The colt's chances for a Triple Crown were dashed by a third-place finish in the Preakness.