"Personal matters have diverted attention away from the important work 'Sesame Street' is doing and I cannot allow it to go on any longer," the 52-year-old performer said in a statement. "I am deeply sorry to be leaving and am looking forward to resolving these personal matters privately."
His departure came as a 24-year-old college student, Cecil Singleton, sued Clash for more than $5 million Tuesday, accusing the actor of engaging in sexual behavior with him when he was 15. Singleton charged that Clash made a habit of trolling gay chat lines for underage boys and meeting them for sex.
It was the second such allegation in just over a week. On Nov. 12, a man in his 20s said he had sex with Clash at age 16. A day later, though, the young man recanted, saying their relationship was adult and consensual.
Clash was a young puppeteer at "Sesame Street" in the mid-1980s when was assigned a little-used puppet now known as Elmo and turned him into a star, creating his high-pitched voice and child-like personality. Clash also served as the show's senior Muppet coordinator and Muppet captain, winning 23 daytime Emmy awards and one prime-time Emmy.
In a statement, Sesame Workshop said that "the controversy surrounding Kevin's personal life has become a distraction that none of us want," and that Clash had concluded "he can no longer be effective in his job."
"This is a sad day for Sesame Street," the company said.
Clash did not address the new allegations. He said previously that he had an adult and consensual relationship with the first accuser. The divorced father of a grown daughter, he acknowledged that he is gay.
At a news conference Tuesday, Singleton said he and Clash met on a gay chat line when he was 15, and for a two-week period, they had sexual contact but not intercourse. He said he didn't know what Clash did for a living until he was 19 and Googled the man's name.
"I was shocked when I found out what he did for a living," said Singleton, a student in criminal psychology who lives in New York but would not say where he goes to school.
He said he didn't consider speaking up until he heard about last week's accusation.
"I thought I was a unique circumstance," Singleton said. "I did not know that it was something he had done habitually."
Singleton's lawyer, Jeff Herman, said he had been contacted by two other potential victims and expects additional legal action. Sex with a person under 17 is a felony in New York if the perpetrator is 21 or older.
Elmo has been a major moneymaker for Sesame Workshop. By one estimate, Elmo toys account for one-half to two-thirds of the $75 million in annual sales the Sesame Street toy line generates for Hasbro.
Clash became something of a star himself. In 2006, he published an autobiography, "My Life as a Furry Red Monster," and he was the subject of the 2011 documentary "Being Elmo: A Puppeteer's Journey."
Episodes with Clash performing as Elmo will presumably continue well into 2014. Taping of season No. 44 will wrap by mid-December and will begin airing next September, according to someone close to the show who spoke on condition of anonymity because the person was not authorized to publicly discuss details of its production.
As for who might take over as Elmo, other "Sesame Street" puppeteers have been trained to serve as Clash's stand-in, Sesame Workshop said. "Elmo is bigger than any one person," the company said last week.
On Tuesday, Hasbro echoed that sentiment with its own statement: "We are confident that Elmo will remain an integral part of Sesame Street and that Sesame Street toys will continue to delight children for years to come."