The Fox network show has been unable to match the ratings success of Cowell's previous singing contest American Idol.
The X Factor USA's audience dropped from 12 million in 2011 to six million last year.
The news follows Cowell's announcement that he will be back on the UK version in the autumn after three years away.
"I've had a fantastic time over the last 12 years, both on The X Factor and American Idol," Cowell said in a statement about the US show's cancellation.
"And apart from being lucky enough to find some amazing talent on the shows, I have always had an incredible welcome from the American public - most of the time!"