MP Dame Louise Ellman has quit the Labour Party, saying Jeremy Corbyn is "not fit" to become prime minister.
The Liverpool Riverside MP said in a letter she had been "deeply troubled" by the "growth of anti-Semitism" in Labour in recent years.
Dame Louise, who is Jewish, has been a party member for 55 years but said she "can no longer advocate voting Labour when it risks Corbyn becoming PM".
Labour said it was taking "robust action" to root out anti-Semitism.
Her local Labour Party said it "recognises the hard work and commitment Louise has shown to her constituents over the past 22 years".
Dame Louise, who has been an MP since 1997, said anti-Semitism had become "mainstream" in Labour under Mr Corbyn's leadership.
"I believe that Jeremy Corbyn is not fit to serve as our prime minister," she said.
"With a looming general election and the possibility of him becoming prime minister, I feel I have to take a stand."
BBC political editor Laura Kuenssberg said her resignation letter was "extraordinary".
Dame Louise told Radio 4's Today programme that under Mr Corbyn the Labour Party had "become a very extreme and uncomfortable place, with no room for dissent".
"It's now come to a situation where the Equality and Human Rights Commission is conducting a statutory investigation into the Labour Party to establish whether it is intuitionally anti-Semitic," she said.
"This is extremely distressing, indeed I found it very traumatic, and I think it does mean that the Labour Party under Jeremy Corbyn is simply not fit."
The Equality and Human Rights Commission launched a formal investigation in March into the Labour Party over allegations of anti-Semitism, following referrals from Jewish groups.
It is only the second time the government-funded equality watchdog has investigated a political party, after ordering the far-right British National Party to rewrite its constitution in 2010.
The MP said she now had "no political home" and stressed she had no intention of defecting to another political party, as other former Labour MPs had done, and hoped to be able to return to Labour under different leadership.
She described her decision as "truly agonising, as it has been for the thousands of other party members who have already left".
'Abused and driven out'
Earlier this year, Luciana Berger, MP for Liverpool Wavertree since 2010, left Labour in protest at the handling of anti-Semitism allegations.
She subsequently joined the Liberal Democrats.
"Jewish members have been bullied, abused and driven out," Dame Louise added in her letter.
"A party that permits anti-Jewish racism to flourish cannot be called anti-racist.
"This is not compatible with the Labour Party's values of equality, tolerance and respect for minorities.
"My values - traditional Labour values - have remained the same. It is Labour, under Jeremy Corbyn, that has changed."
The Labour Party has been the focus of a series of anti-Semitism allegations since mid-2016.
An initial inquiry by Labour peer Baroness Chakrabarti concluded the party was not overrun by anti-Semitism but had an "occasionally toxic atmosphere".
Despite pledges by Mr Corbyn that he is getting to grips with the issue and strengthening internal disciplinary procedures, the allegations have continued.
In May, a member of the National Executive Committee was suspended after LBC Radio reported he had been recorded saying the Israeli embassy was "almost certainly" behind the anti-Semitism row. He has since apologised and been re-elected.
And in June, the newly elected Peterborough MP apologised for liking a Facebook post which said Theresa May had a "Zionist slave masters agenda" - although she said she had not read that part of the text.
Labour MP Hilary Benn called Dame Louise an "outstanding" MP, telling the BBC: "I think it is a terrible shame that Louise feels she has had to come to this decision.
"It's clear from reading her letter that she has agonised over this and I think it shows there is a continuing problem which the party needs to get to grips with.
"I think all of us need to do more to confront this."
Fellow MPs reacted to the news of Mrs Ellman's resignation.
This is very sad news. Thank you, Louise, for your terrific contribution to Parliament, politics and the Labour Party! https://t.co/Jlo5x6s3fM— Harriet Harman (@HarrietHarman) October 16, 2019
I’ve known Louise for 30 years. She was a supremely competent leader of Lancashire County Council, a skilful opponent and utterly dedicated to the Labour movement. If there’s no place for Louise Ellman in the 2019 Labour Party, they are finished as a serious force. https://t.co/t1lwtEmMPE— Tim Farron (@timfarron) October 16, 2019
Dame Louise Ellman's resignation is a tragic loss to our movement. My full statement is below; pic.twitter.com/ms19mckkTb— Ruth Smeeth MP (@RuthSmeeth) October 16, 2019
Mr Corbyn has insisted the party is addressing concerns and in July proposed changes to Labour's complaints system to speed up the expulsion of members over anti-Semitism.
A party spokesman said Mr Corbyn thanked Dame Louise for her service "over many years".
"Jeremy Corbyn and the Labour Party are fully committed to the support, defence and celebration of the Jewish community and continue to take robust action to root out anti-Semitism in the party and wider society," they said.
Tim Hayden, chairman of the Liverpool Riverside Constituency paid tribute to Dame Louise's "hard work and commitment", but said: "Unfortunately she made it very clear at the last CLP that she could not support a Jeremy Corbyn-led government.
"This inevitably meant that Louise would be triggered and was very unlikely to win any reselection process."
He said the group "totally supports Jeremy Corbyn and the policies of the Labour Party that seek to benefit the many".