Archbishop Bernard Law of Boston has resigned amid accusations that he covered up paedophilia by Roman Catholic priests in his diocese.
The Pope accepted the cardinal’s resignation on Friday morning after a short meeting in the Vatican.
Cardinal Law had faced calls to step down from some of his own priests over the child sex abuse scandal.
The Boston diocese faces some 450 lawsuits alleging child abuse and is considering filing for bankruptcy.
Critics have accused Cardinal Law of moving priests from one pulpit to another rather than confronting the problem.
Call for reconciliation
In a short statement after the Pope accepted the resignation, Cardinal Law apologised and begged forgiveness.
He said he hoped his resignation would “help the Archdiocese of Boston to experience the healing, reconciliation and unity which are so desperately needed”.
But a spokesman for a Catholic pressure group in Boston said that merely apologising was not enough.
“These are not the actions of someone who is repenting,” Mike Emerton, a spokesman for Voice of the Faithful, told BBC News Online.
The BBC’s David Willey in Rome says the Pope’s decision to accept the resignation was part of a “damage limitation exercise”.
The Boston diocese has been rocked by allegations of sexual misconduct by dozens of priests over decades.
Documents released by the Church contained accusations that:
A priest had molested a 17-year-old on 21 consecutive nights as they drove across the country.
Cardinal Law had recommended one of his priests for a job as military chaplain saying there was no reason he should not work with young people after the church paid $200,000 to the family of a youth allegedly abused by the priest.
Priests had fathered children, traded cocaine for sex with boys and abused girls training to become nuns.
The Reverend Paul Shanley, another Boston area priest, faces 10 charges of child rape. He was freed on bail this week.
Cardinal Law spent a week in Rome meeting senior Vatican officials before handing in his resignation.
He had offered it once before, in April, but the Pope refused it then.
The Vatican said Bishop Richard Lennon, who is an auxiliary bishop in Boston, would run the Boston diocese temporarily.
Earlier in the week, Voice of the Faithful, which claims to represent more than 25,000 parishioners, called for the cardinal to resign, due to what it called “a pervasive pattern of behaviour to conceal and cover up evil actions”.
Cardinal Law has reportedly been ordered to appear before a Boston grand jury investigating the allegations of child abuse.
A spokeswoman for the diocese said after the resignation that Cardinal Law would fulfil all his legal obligations.
On Thursday, Massachusetts Attorney General Tom Reilly accused the diocese of perpetrating a “cover-up”.
Boston newspapers have reported that Mr Reilly’s office has spent months building a case against priests accused of child abuse.
Cardinal Law remains a cardinal; he has resigned only as Archbishop of Boston. It is not clear what the 71-year-old prelate will do now.
He is expected to return to Boston over the weekend.