US film director Steven Spielberg has withdrawn as an artistic adviser for the 2008 Olympics in Beijing.
Mr Spielberg formally announced his decision in a statement
In a statement, he accused China of not doing enough to pressure Sudan to end the "continuing human suffering" in the troubled western Darfur region.
At least 200,000 people have been killed and two million forced from their homes in the five-year conflict.
Beijing has not yet responded to the move, which correspondents say is its first big setback in staging the Games.
A source in the Beijing Olympic Committee said a response was being discussed at the highest levels but had not yet been made public.
But the BBC's James Reynolds in Beijing says the decision will anger and worry the authorities there.
Since Beijing won the right to host the Games it has always tried to keep China's politics and China's Olympics separate, he says, and it has attacked anyone who has tried to link the two.
Mr Spielberg, who had been brought in as artistic adviser for the opening and closing ceremonies of the Games, said the cause of Darfur was more important than his role.
"I find that my conscience will not allow me to continue business as usual," he said in a statement.
"At this point, my time and energy must be spent not on Olympic ceremonies, but on doing all I can to help bring an end to the unspeakable crimes against humanity that continue to be committed in Darfur."
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He added: "Sudan's government bears the bulk of the responsibility for these on-going crimes, but the international community, and particularly China, should be doing more."
Rebel groups in Darfur said this was exactly the kind of pressure that was needed to get Beijing to change its policy towards the Sudanese government.
"This is a noble move by Spielberg," Sudan Liberation Movement (SLM) leader Abdul Wahid Mohammad Ahmed al-Nur told the Sudan Tribune newspaper.
"He will certainly go down in history as someone who gave human lives precedence over fame and money."
Ahmed Abdel Shafi, who leads an SLM splinter group, told the BBC: "I commend him for his strong position. This is a lesson to the rest of the world that people should distance themselves from China."
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Another group, the Justice and Equality Movement, has appealed to countries sending teams to boycott the games.
The real question is why the Olympics were awarded to China in the first place
The International Olympic Committee said the decision was a personal one made by Mr Spielberg.
"The IOC recognise Darfur is a highly complex issue, with tragic circumstances, but is a matter for the UN to resolve," the committee said in a statement.
Sudan, with its vast oil reserves, sells some two-thirds of its oil to Beijing.
In turn, Beijing sells weapons to the Sudanese government and has defended Khartoum in the UN Security Council.
As a result, China has been criticised for its links with a government ostracised by many for its role in the ongoing crisis in Darfur.
Earlier on Tuesday, as part of a "Global Day of Action" focusing on Darfur, an open letter signed by Nobel Peace Prize laureates and former Olympians was sent to China's president.
Actress Mia Farrow, who signed the letter and had pressed Mr Spielberg to end his involvement, said his decision sent out the right signal to the Chinese government.
She said: "I'm delighted by his decision and it's a desperate time for Darfur, so this is a shred of good news in a very bleak week."