He would not stand as an independent or a third party candidate nor would he endorse either of his opponents, Senator John Kerry of Massachusetts and John Edwards of North Carolina.
He said: "The bottom line is that we must beat George Bush in November, whatever it takes." But he added: "We are not going away."
Instead, Mr Dean promised to build a nationwide organisation over the next few weeks, using the coast-to-coast grassroots network he has built up over two years to ensure his voice continued to be heard.
"A beginning not an end", was the typically defiant message to supporters on his website "Dean For America", which has been such a potent fundraising and organisational tool, and has helped revolutionise the way politics is practised here.
Thus has ended one of the most extraordinary American political odysseys of modern times, where the obscure former governor of a tiny state tucked up against the Canadian border emerged from nowhere as the prohibitive favourite to win his demoralised party's nomination, only to suffer a collapse even swifter and more precipitous than his astounding rise to prominence.
Mr Dean did not win one of 17 primaries or caucuses held so far.
He was undermined by gaffes, and by a growing feeling among ordinary Democratic voters that while they agreed with his powerful anti-Bush, anti-Iraq war message, they would prefer someone else, with a better chance of beating Mr Bush.
After his resounding defeat in Iowa on 19 January, when he finished a limp third behind Mr Kerry and Mr Edwards - and the much derided "I Have a Scream" outburst to his supporters on that night - his campaign unravelled.
First his campaign manager, then his national campaign chairman left. By the beginning of this month, the candidate who raised $41m in contributions found himself virtually broke, forced to suspend pay to many campaign staffers.
Dean rallies and meetings that once spilled out on surrounding streets, suddenly had to conceal rows of empty seats.
At the same time his rivals, above all Mr Kerry, borrowed generously from the Dean platform, sharpening their rhetoric against Mr Bush and making many of Mr Dean's populist themes their own.
In just six weeks, Mr Dean turned from front-runner with the endorsement of party luminaries from former vice-president Al Gore down, into a fading, distant, outsider.
Unions and others who had flocked to his banner in late 2003 summarily abandoned him.
But Democrat and Republican strategists alike agree, the man from Vermont has served a vital purpose, galvanising the party, and in Mr Dean's own boastful words this week, "writing the Democratic platform for 2004".
Yesterday he vividly set out that legacy to his cheering followers.
"We showed that by standing up and telling the truth, you can actually win support from voters," he said to tumultuous applause.
"We have exposed the dangerous radical nature of George W Bush's agenda. We have shown that it's a far better strategy to stand up against his right-wing agenda than it is to co-operate with it. We have led this party to discover where it heart and soul is."
The question now is whether Mr Dean's impressive-sounding army - some 650,000 registered supporters with the campaign - has the impact he expects.
Many political professionals believe that enthusiasm may not be easily transferred to another candidate. Dean activists, many of them young people attracted into politics for the first time by the former Vermont governor, could be especially lukewarm to Mr Kerry, now the odds-on favourite to win the nomination.
For these "Deaniacs", the Massachusetts senator comes across as a typical Washington politician, cynically ready to change his views to suit the cause of the moment.
Mr Dean has made clear several times that he prefers the eloquent and engaging Mr Edwards to the aloof Mr Kerry.
Indeed, even before the Wisconsin vote, Mr Dean had a private meeting with the North Carolina senator. The discussion was apparently inconclusive, but it fanned speculation that Mr Dean may offer help to Mr Edwards, while stopping short of a formal endorsement.
But his main priority seems to be to turn his existing organisation into a permanent fixture on the political scene, outside the Democratic political hierarchy.
Some say his aggressive and trenchant style would make him the perfect left-of-centre talk radio host to take on Rush Limbaugh and the other conservatives who dominate the airwaves.
But now Mr Edwards has secured what he has wanted from the start, a one-on-one race against John Kerry for the nomination.
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INDEPENDENT
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Howard Dean's 'Iowa screech'
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