Despite a glittering resume, large crowds at campaign events and polls showing her to be popular with much of the public, Dole's attempt to become the first female president failed to yield enough campaign cash.
"The bottom line remains money," she said at a hastily arranged news conference.
Her husband, Bob Dole, the 1996 Republican presidential nominee, who seldom appeared at her events, stood behind her, gravely nodding assent.
Elizabeth Dole, who was a Cabinet secretary in the Reagan and Bush administrations, is the fifth candidate to quit the once-crowded Republican field.
Her withdrawal could provide a further boost for Bush, who leads his remaining rivals by a wide margin in early polls. Her aides said the Texas governor appears to be the clear second choice of Dole supporters.
The Republican contest is likely to become a three-way contest among Bush; publisher Steve Forbes, who alone can match Bush's enormous campaign bank account; and Arizona Sen. John McCain, now in second place in New Hampshire polling.
Dole's decision to abandon the race, widely rumored for weeks, came with little advance notice. Her organization had been moving ahead with arrangements for her to formally enter the race next month.
Instead, supporters and aides joined reporters in the crowded basement of a downtown hotel for the withdrawal announcement, which the 63-year-old North Carolina native read in a firm, composed voice, her eyes glistening.
"I have been all but overwhelmed by women of all ages who've invested me with their hopes and their dreams," said Dole, who was frequently described as the first serious female presidential candidate.
She said that "much has been made of the symbolism of my candidacy," often by Dole herself, who liked to tell supporters that they were "making history" with her. Looking back on that effort, Dole said she had "paved the way for the person who will be the first woman president."
Wendy J. Schiller, a Brown University political scientist, said Dole's nine-month campaign will make her a "much more viable" contender for the vice presidency.
Dole's pioneering candidacy faced resistance from some male voters, who, polls showed, were not comfortable with the idea of a woman president.
But Schiller noted that Dole's failure to make it to the starting line of next year's primaries illustrated another dilemma for a woman seeking the Republican nomination.
"Women in the Republican Party do not show enough support for a woman candidate," she said. "It's much tougher than being a Democratic female candidate."
Dole said her decision to leave the race came Sunday on a cross-country plane ride home from Seattle, where she had been well-received at a Republican women's convention. She concluded, she said, that it would be "futile to continue."
She referred to rumors over the past two weeks that she would drop out, which she said further hindered fund-raising.
Aides to McCain, who were blamed by the Dole campaign for circulating those rumors, have said privately that her pullout would hurt McCain politically. With Dole out of the race, they reason, it will be easier for Bush to win the Iowa caucuses in January.
High point in Iowa
Iowa was central to Dole's strategy. Her third-place finish in a straw poll there in August was the high point of her campaign.
But she failed to capitalize on it immediately, choosing to go on vacation instead. Aides said later that she was exhausted at the time and needed rest.
Dole said she tried to run "a nontraditional campaign" that would attract new people into politics. To a considerable extent, she did.
One out of every two contributors to her campaign over the past three months was a women, well above average for a campaign, she said. And her events attracted crowds of political newcomers, including young people of both sexes drawn to the idea of a woman presidential contender.
But the first-time candidate never seemed comfortable making the transition from political spouse to political principal.
Slow to develop policy positions on issues, she often ducked difficult questions. Wary of uncontrolled situations, she shielded herself from reporters. She started off a strong second in the polls because she was well-known. But she was unable to capitalize on her popularity and had slipped to a distant second place by the time she withdrew.
Doubts about her prospects were reinforced in May, when her husband was widely quoted as saying that her candidacy had been slow off the mark and that he wanted to give money to one of her opponents, McCain. He also openly questioned whether she would remain in the race.
Her effort foundered on the most traditional political reality, "a kind of Catch-22," she said, in which inadequate funding restricted her ability to reach voters. That, in turn, made it harder to raise additional cash, prompting questions about the viability of her candidacy.
"Money does become the message, and it makes it pretty tough," she said.
Dole said Bush and Forbes, who has begun airing TV commercials, "enjoy a 75- or 80-to-1 cash advantage" over her money-starved campaign, which had less than $900,000 in the bank at the end of last month.
"Perhaps I could handle 2-to-1 or even 10-to-1, but not 80-to-1," she said.
Dole, who is likely to appear on public "short lists" of vice presidential possibilities, said this is "by no means the last chapter" in her 30 years of public service.
"While I may not be a candidate for the presidency in 2000, I'm a long way from the twilight," she said. In response to questions from reporters, she said she had not considered the vice presidency and declined to comment further on that topic.
Dole did not immediately endorse any of her Republican rivals, but she sounded awe-struck by the strength of Bush's candidacy, calling it "a phenomenon" unique in politics.
Bush praised Dole yesterday as "a trailblazer" who had brought "dignity and class" to the Republican campaign.
Dole said that when her campaign began last winter, she had no idea she would be facing an opponent, in Bush, who would raise more money than anyone else in history and would be backed by most of the party establishment.
Dole's campaign manager, Tom Daffron, a one-time executive with the Baltimore Orioles, pointed to polls showing that Dole's supporters were three or four times more likely to support Bush than McCain as a second choice.
"Could Bush lose this? Sure. Is it likely? No," said Daffron.