Zia Yusuf has resigned as the chairman of Reform UK, saying working to get the party elected was no longer "a good use of my time".
In a post on social media, Yusuf did not expand further on his reasons for stepping down.
However, it comes after he said it was "dumb" for the party's newest MP to call on Sir Keir Starmer to ban the burka.
Reform leader Nigel Farage said he was "genuinely sorry" Yusuf was resigning, describing him as "enormously talented".
Farage said Yusuf was "a huge factor" in the party's success in last month's elections, when Reform won a by-election, two mayoral races and gained 677 new councillors.
However, he told GB News he believed Yusuf had "had enough" of politics, which can be "totally unrelenting".
Farage said he had "suspicions" Yusuf might quit after he seemed "very disengaged" when the pair spoke on Wednesday morning but was only given a "10-minute warning" his resignation was coming.
Asked about reports that some in the party found Yusuf difficult to deal with, Farage said "not everyone got on with him".
He added: "Were his interpersonal skills at the top of his list of attributes? No. But I always found him, with me, very polite."
In a post on X, Yusuf wrote: "11 months ago I became chairman of Reform. I've worked full time as a volunteer to take the party from 14 to 30% [in national polls], quadrupled its membership and delivered historic electoral results.
"I no longer believe working to get a Reform government elected is a good use of my time, and hereby resign the office."
Earlier, Yusuf had criticised Sarah Pochin - who won last month's Runcorn and Helsby by-election - for urging Sir Keir Starmer to ban the burka "in the interests of public safety" during her Prime Minister's Questions debut on Wednesday.
He said it was "dumb for a party to ask the PM if they would do something the party itself wouldn't do".
Pochin's call appeared to go down well with Reform's other MPs, although a party spokesman said it was "not party policy".
The party's deputy leader, Richard Tice, said there should be a "national debate" about a possible ban.
However he declined to state what his position would be in such a debate.
In response to Yusuf quitting, Pochin said he had been "a great friend and colleague", adding that "the professionalisation he brought to Reform UK will have a lasting legacy".
Yusuf, who was previously a member of the Conservative Party, became Reform UK's chairman shortly after last year's general election.
A former banker who sold his tech start-up company for more than £200m, Yusuf has described himself as a "proud British Muslim patriot".
He donated £200,000 to Reform during the general election campaign and as chairman he was given the job of professionalising the party, wooing donors and increasing Reform UK's activist base.
Yusuf was seen as central to Reform's operation and had been spearheading the party's so-called Doge teams to cut wasteful spending in the councils it now controls.
The acronym refers to Elon Musk's Department of Government Efficiency in the US.
Tech entrepreneur Nathaniel Fried, who was brought in to lead the Doge unit, said he was stepping down with Yusuf.
"I have a huge amount of respect for the work that the councils are doing to save taxpayer money, and reduce wastage," he wrote on X.
But he added that Yusuf "got me in and I believe it is appropriate for me to leave with him".
Yusuf's unexpected resignation came after he had spent recent days trumpeting the Doge initiative, which was only formally launched this week.
He has previously hailed Farage as the UK's "next prime minister" who "will return Britain to greatness".
Prominent Reform supporter Tim Montgomerie said he was "a big fan" of Yusuf but added: "He was a young man in a hurry - he upset quite a lot of people who didn't want the party to professionalise, to modernise.
"He faced a lot of prejudice, not necessarily from inside the party but on social media, I think that affected him.
"I think the row over the burka question that the new MP asked yesterday may have been the last straw for him."
He said Reform was "looking like a party with too many internal tensions, but there is time to put that right".
Liberal Democrat Deputy Leader Daisy Cooper said: "By sacking himself, Zia Yusuf seems to be leading the 'UK Doge' by example. You have to admire his commitment to the cause.
"It's already clear Reform UK cannot deliver for the communities they are elected to stand up for. Instead, they have copied the Conservative playbook of fighting like rats in a sack."
A Labour Party spokesperson said: "If Nigel Farage can't manage a handful of politicians, how on earth could he run a country?
"He has fallen out with everyone he has ever worked with. Reform are just not serious."
Conservative leader Kemi Badenoch said: "Reform is not a political party. It is a fan club."
Reform has seen its support in national polls grow since last year's general election, when the party won 14.3% of the vote share and secured five MPs.
However, it has been dogged by infighting which culminated in Great Yarmouth MP Rupert Lowe being expelled from the party.
It came after he was accused of harassing staff members and threatening "physical violence" against Yusuf.
Lowe denied the claims and last month the Crown Prosecution Service said he would not face criminal charges in relation to the allegation of threats, after he was referred to the police by the party.
Responding to Yusuf's resignation, Lowe said: "The question is - how did a man with no political experience be given such vast power within Reform?"