Deputy prime minister Ivailo Kalfin, who also served as labour minister, stepped down after the centre-left ABV (Alternative for Bulgarian Revival) said it would no longer back the government.
Founded by former president Georgy Parvanov, the party has 11 deputies, which guaranteed Borisov a narrow majority of 125 within the 240-seat parliament.
A former bodyguard, firefighter and police chief, Borisov has governed on the basis of a fluctuating majority for the past three years following a first term in office between 2009 and February 2013 when he stepped down during mass nationwide protests about poverty and corruption.
The two parties had also secured support from the moderate nationalist Patriotic Front (18 seats) and the ABV.
ABV's decision to withdraw its support for the coalition gives greater weight to the Patriotic Front, which recently presented a bill which would ban Muslim women from wearing the full veil.
Although the ABV emerged out of a split within the Bulgarian Socialist party, the two may decided to field a joint candidate for the upcoming presidential election in October.