Reform, led by Brexit campaigner Nigel Farage, won five parliamentary seats in a breakthrough result at last July's general election, and last month performed strongly in local elections.
The party currently leads opinion polls, ahead of Prime Minister Keir Starmer's Labour Party.
"I no longer believe working to get a Reform government elected is a good use of my time, and hereby resign the office," Yusuf said, without giving further details of the reason for his exit.
Divisions in the party's upper ranks have been made public before.
In March Reform referred one of its MPs, Rupert Lowe, to police over allegations including threats of physical violence against Yusuf.
Prosecutors later said they would not bring charges against Lowe, who was suspended by the party.
Earlier on Thursday, Yusuf said Reform MP Sarah Pochin's question to Starmer in parliament, asking whether the government would consider banning the burqa, was "dumb".
Farage said in a post on X that he was "genuinely sorry" Yusuf had decided to stand down.
"Politics can be a highly pressured and difficult game and Zia has clearly had enough. He is a loss to us and public life," Farage said.
Yusuf, who is not an MP himself, became Reform chairman last year.
Yusuf's resignation comes on the day Reform hopes to cause an upset in Scotland, where it is contesting a local by-election in Hamilton, Larkhall and Stonehouse.
Scottish First Minister John Swinney has described the contest as a "two-horse race" between his SNP and Reform.
with PA
10°C