Speaking before supporters in Little Rock, Ark. Wednesday, Clark praised his fellow Democrats and his legion of volunteers.
"Today I end my campaign for the presidency, but our party's campaign to change America is just beginning," Clark said.
But the general stressed he ended "this phase more full of hope and more committed to building a better America."
Clark also challenged the Democratic Party to stand against President Bush and the foreign policy that led to the war in Iraq.
"We have got our armed forces bogged down in the wrong war -- a war we did not need to fight," Clark said.
"I'll do everything I can to make sure George W. Bush does not get away with playing politics with national security," Clark said.
Clark officials said the campaign never recovered from skipping the Iowa caucuses.
"I think probably the biggest reason is the tremendous momentum that Senator Kerry built coming out of the Iowa and New Hampshire races," campaign spokesman Matt Bennett told reporters traveling with Clark late Tuesday night. "The mountain got too steep to climb."
The general, who had never run for public office before, won one primary in Oklahoma and had some 102 delegates committed to him at the party convention.
Just an hour before the spokesman announced the end of the campaign, Clark spoke to hundreds of supporters in Memphis, Tenn., saying his work to improve America would continue.
"We may have the lost the battle today, but, I'll tell you now, we are not going to lose the war for America's future," Clark said. "Our goal remains the same: to change the direction of our country and bring a higher standard of leadership to the White House."
He also specifically praised Sens. John Kerry and John Edwards.
"They are good men, good Democrats, and real patriots -- and they've run great campaigns," Clark said.
The general also continued to hammer the president and call for new leadership in the country.
To the cheers of supporters, Clark said he would continue to work to build "an America where we understand that debate and dissent -- that questioning your leaders and holding them accountable -- is the highest form of patriotism. And where being patriotic means using force only as a last resort, not as a political tool."
The general, a decorated Viet Nam veteran who was wounded in battle, graduated first in his class at West Point before going on to become a Rhodes scholar. As NATO's top commander he led the war effort in Bosnia. After leaving military service Clark worked as a consultant and public speaker.
Neither Clark nor campaign officials have commented about the general's plans for the future.