The 47-year-old was in the midst of a contentious primary challenge against Republican incumbent Senator Mike Enzi of Wyoming. The western state is solidly Republican, so the primary winner is nearly certain to defeat their Democratic opponent.
"Serious health issues have recently arisen in our family, and under the circumstances, I have decided to discontinue my campaign," Cheney said in a statement.
"My children and their futures were the motivation for our campaign and their health and well-being will always be my overriding priority."
Cheney has consistently trailed Enzi in Wyoming polls, and she never gained significant traction in her campaign.
More From This Section
She sparked a bitter family feud in November when she went on television and voiced her opposition to gay marriage.
Cheney's younger sister Mary, 44, is a lesbian, and she and her wife Heather Poe took Liz Cheney's comments as a personal affront, saying they felt they were being treated as "second-class citizens."
Liz Cheney said she loves her sister and her sister's family "very much," but "this is just an issue on which we disagree."
Despite ending her short-lived Senate run, Cheney pledged to continue promoting conservative political values.
"As a mother and a patriot, I know that the work of defending freedom and protecting liberty must continue for each generation," she said.
"Though this campaign stops today, my commitment to keep fighting with you and your families for the fundamental values that have made this nation and Wyoming great will never stop."
Cheney, an attorney who has spent many years in the Washington area and worked at the US State Department under President George W Bush, also stood accused of moving from Virginia to Wyoming in 2012 to be able to run for the Senate seat.
Dick Cheney served as Bush's vice president from 2001 to 2009.