Adm. William "Fox" Fallon, head of the U.S. Central Command headquarters responsible for the Middle East, insisted he did not disagree with the Bush administration over Iran but perceptions of a rift made it difficult for him to do his job.
Defense Secretary Robert Gates dismissed suggestions that Fallon's departure made war with Iran more likely.
"The notion that this decision portends anything in terms of a change in Iran policy is ... ridiculous," Gates said.
"Admiral Fallon reached this difficult decision entirely on his own," Gates said at the Pentagon.
"I believe it was the right thing to do, even though I do not believe there are, in fact, significant differences between his views and administration policy."
The Bush administration says its policy is to use diplomacy to resolve differences with Iran, particularly over Tehran's nuclear program, but it will not rule out military action.
Washington and other Western nations say Iran is trying to develop the capability to build nuclear weapons. Iran says its program is to produce energy.
Fallon's headquarters in Tampa, Florida, oversees U.S. operations in 27 countries, including Iraq and Afghanistan.
The first Navy officer to serve as Central Command chief, 63-year-old Fallon has been in the post for just under a year. Gates accepted his request to retire at the end of the month.
Fallon is known as a tough, plain-speaking commander but also has a reputation for favouring dialogue. He pursued good relations with China when he headed U.S. Pacific Command.
"BETWEEN WAR AND PEACE"
Titled "The Man Between War And Peace," the Esquire article that led to his resignation described him as challenging the White House and urging restraint on Iran.
