The Northern Irishman, ranked number one in the world, began on the back nine at the Palm Beach Gardens course and played his opening eight holes of the round in seven over par.
He then found the water at the 18th - his ninth hole - and immediately quit the tournament.
"I'm not in a great place mentally," he told reporters, according to ESPN.com. "I can't really say much, guys. I'm just in a bad place mentally.''
Shortly after, McIlroy released a statement through the PGA Tour, citing wisdom tooth pain for his exit.
He said: "I sincerely apologise to the Honda Classic and PGA Tour for my sudden withdrawal.
"I have been suffering with a sore wisdom tooth, which is due to come out in the near future. It began bothering me again last night, so I relieved it with [painkiller] Advil.
"It was very painful again this morning, and I was simply unable to concentrate. It was really bothering me and had begun to affect my playing partners."
McIlroy had a level-par 70 yesterday, but was set to miss the cut after his flurry of dropped shots before deciding enough was enough.
He had double-bogeyed the 11th, taken a seven at the par-four 16th, and also given shots away at the 13th and 17th holes.
He was playing in a group with Open champion Ernie Els and American Mark Wilson.
His statement continued: "I came here with every intention of defending my Honda Classic title. Even though my results haven't revealed it, I really felt like I was rounding a corner.
"This is one of my favourite tournaments of the year and I regret having to make the decision to withdraw, but it was one I had to make."
The PGA Tour reported it was the first time McIlroy has withdrawn during a tournament.
The 23-year-old has struggled to rediscover the form that has elevated him to the top of the world rankings so far in 2013, highlighted by his first-round exit at the Accenture Match Play Championship to Ireland's Shane Lowry last week.
He signed a lucrative sponsorship deal with Nike last month and his performances with the manufacturer's clubs have fallen below expectations.
McIlroy also missed the cut at the Abu Dhabi HSBC Championship by four shots last month.
The link between McIlroy's slump in form and his new clubs has already been speculated on, and although he admitted the change had affected his confidence he had yesterday insisted he was rounding the corner.
Speaking to the PGA Tour website, McIlroy said: "It's hard to commit to the shot that you need to play every time. If you know that you should play a fade and you're not comfortable with it, it's hard to do."
Asked if he was close to fixing his swing, he added: "Definitely. I felt like I hit the ball okay, not as good as I can, but it's getting there."
In McIlroy's absence, Michael Thompson climbed to the top of the leaderboard with a five-under 65 moving him to eight-under for the tournament.
Luke Guthrie was in the process of trying to catch him, one shot behind after 14 holes, while Lee Westwood and Graeme McDowell both signed for rounds of 68 that left them two shots off the lead.
However, overnight leader Camilo Villegas endured a miserable day as he signed for a 77, sporting five bogeys and a double bogey to plummet to a share of 72nd place.
Rickie Fowler, who had been part of the pack one shot off the lead, was also suffering as his 71 dropped him to joint-ninth.