USA Basketball confirmed Fox's decision in a release issued Saturday, shortly before the team was set to board a plane for Australia.
Fox is the third player to leave the roster this week. Houston Rockets forward P.J. Tucker pulled out with an ankle injury Friday and Toronto Raptors guard Kyle Lowry withdrew Monday with a thumb injury.
Fox had two points and one assist in about six minutes of playing time in Friday night's 90-81 victory against Spain in an exhibition game in Anaheim, a tune-up for the upcoming FIBA World Cup in Shanghai, China.
Fox, 21, averaged 17.3 points, 7.3 assists, 3.8 rebounds and 1.6 steals in 81 games in his second NBA season in 2018-19.
Fox's withdrawal leaves Team USA with 13 players competing for spots on the 12-man roster -- which doesn't have to be finalized until Aug. 29. The remaining participants:
Centers -- Brook Lopez, Milwaukee; Mason Plumlee, Denver; Myles Turner, Indiana.
The U.S. squad, coached by San Antonio Spurs head coach Gregg Popovich, is scheduled to play three games -- two against Australia, one against Canada -- and practice five times in Australia before heading to Shanghai.
The 32-team World Cup is scheduled for Aug. 31-Sept. 15. Team USA plays its first game on Sept. 1 against the Czech Republic.
--Field Level Media