The party, the second largest in the alliance and holder of 69 house seats, said its departure was due to the effect on the country of a leak on Wednesday of a phone call between Paetongtarn and Hun Sen, the influential former prime minister of Cambodia, with which Thailand is involved in an escalating border dispute.
"Bhumjaithai will work with all Thai people to support the army and officials who safeguard the sovereignty, territorial integrity and interests of Thailand in all ways," Bhumjaithai said in a statement.
A spokesperson for Paetongtarn's government did not answer calls seeking comment on the withdrawal.
The exit of Bhumjaithai leaves Paetongtarn's government hanging by a thread and facing declining popularity as it battles to revive a lacklustre economy.
Paetongtarn, 38, was thrust abruptly into the spotlight less than a year ago when she became Thailand's prime minister after her predecessor was removed from office by a court order.
Her position looks increasingly fragile and attention will now shift to whether her remaining 10 coalition members will follow Bhumjaithai.
The row with Cambodia over disputed border areas has prompted fears of clashes after the mobilisation of troops on both sides, with Paetongtarn facing public criticism over her diplomatic response in contrast to the military's tougher rhetoric.
Paetongtarn has insisted she is committed to a peaceful resolution but would do what is required to defend Thailand's sovereignty.
In the leaked June 15 phone call, Paetongtarn said she was facing domestic pressure and urged Hun Sen not to listen to "the other side" in Thailand, which she said included an outspoken Thai general who oversees the army in the border area.
"Bhumjaithia has called on Prime Minister Paetongtarn to show responsibility for making the country lose its integrity, honour to the people and the army," the party said.
