The 53-year-old Paul, who describes himself as a libertarian stressing individual rights and privacy, finished fifth in the Iowa caucuses on Monday with 4.5 percent of the vote.
"It's been an incredible honour to run a principled campaign for the White House. Today, I will end where I began, ready and willing to fight for the cause of Liberty," Paul said in a statement.
"I will continue to carry the torch for Liberty in the United States Senate and I look forward to earning the privilege to represent the people of Kentucky for another term."