The 36-year-old withdrew from the tournament at Bay Hill in Florida about 30 minutes before his scheduled tee time.
"While warming up in the gym this morning, I felt a small twinge in my back. As I started hitting balls on the range before the round, it worsened and developed into muscle spasms in my lower back," McIlroy said in a statement.
"Unfortunately, I'm not able to continue and have to withdraw. I was excited to compete this weekend. I wish the Arnold Palmer Invitational a great finish and look forward to being back next year."
McIlroy, with 29 PGA Tour wins, had previously withdrawn only once from a Tour event at the 2013 Cognizant Classic and is scheduled to defend his title at The Players Championship next week at TPC Sawgrass.
In 2023, ahead of the Tour Championship, McIlroy suffered lower right back spasms that caused his back to seize up while stretching at home, though he still went on to compete.