Gordon Sondland was due to meet behind closed doors on Tuesday with staff from three Democratic-led House committees.
But the envoy was directed by the Department of State not to attend.
Mr Sondland was set to be grilled about any role he played in prodding Ukraine to investigating President Donald Trump's political rival Joe Biden.
Mr Trump said Mr Sondland would only have been testifying to a "kangaroo court".
The Democratic-led impeachment inquiry is trying to establish whether the Republican president withheld nearly $400m in aid to nudge Ukraine's president into launching an inquiry into Mr Biden, whose son, Hunter Biden, was on the board of a Ukrainian energy company.
In a phone call on 25 July, Mr Trump asked the newly elected Volodymyr Zelensky to investigate the former US vice-president, who is a leading Democratic White House contender in next year's election.
A whistleblower raised concerns about the phone call, and the Democratic leader of the House of Representatives, Speaker Nancy Pelosi, announced a formal impeachment investigation last month.
In a statement released through his lawyer, Mr Sondland said he was "profoundly disappointed" he would not be able to testify.
"Ambassador Sondland believes strongly that he acted at all times in the best interests of the United States, and he stands ready to answer the Committee's questions fully and truthfully," said the statement.
Read More (...)