In a statement the Shadow Business Secretary said: "One can imagine what running for leader can be like, understand its demands and the attention but nothing compares to actually doing it and the impact on the rest of one's life.
"Consequently after further reflection I am withdrawing my candidacy."
Speculation his withdrawal is related to the possibility of a potentially negative story appearing in the press has been denied by sources close to him.
Mr Umunna, 36, said in 2011 his politics and moral values "come from my Christianity".
His statement added: "I apologise to all those who have kindly supported and encouraged me to do this and for disappointing them. I know this will come as I surprise to many but I had always wondered whether it was all too soon for me to launch this leadership bid - I fear it was.
"Most importantly, I continued to have very real concerns and worry about this bid's impact on those close to me."