Prejean, 22, retained her title last month despite a controversy over topless photos, missed appearances and her statements against same-sex marriage.
Miss USA pageant owner Donald Trump decided to fire Prejean a month after he gave her a second chance.
"Carrie is a beautiful young woman, and I wish her well as she pursues her other interests," Trump said.
Runner-up Tami Farrell, who was Miss Malibu, will immediately assume the Miss California USA title, state pageant Executive Director Keith Lewis said.
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