Vuelta a España - Cavendish pulls out of Vuelta
Cavendish, who won the Tour de France's green jersey in July, had lost time on the main peloton on all the stages so far in the race and on Monday his team said he was suffering badly in the extremely hot weather.
He is the second HTC-Highroad rider to quit after Australian Matt Goss abandoned on stage one.
"He's not ill, he had no power left in his body and he was totally empty," Cavendish's sports director Jens Zemke said. "He was dropped on a climb and so far from the finish, he had no chance to survive.
By contrast, fellow Briton Bradley Wiggins enjoyed a successful day.
Wiggins had previously described the 23 kms final climb of Sierra Nevada as the first big test of his battle for a high general classification placing in Madrid.
After his Sky team had led the pack in the final segment of climbing, the 31-year-old Londoner finished comfortably with all the main contenders, 11 seconds down on stage winner Daniel Moreno.
"It was another good team performance there, and (team mate) Chris Froome rode his heart out for me again at the end there," Wiggins said.
"Things are going well again, I was pretty happy with how I coped with the heat and I am pleased to have finished where I did."