The organization said in a statement Wednesday that "after further medical evaluation," Biles, 24, decided not to take part "in order to focus on her mental health."
Now, Jade Carey is taking her spot for Team USA.
The 21-year-old didn't qualify initially because she was the third-ranking American behind Biles and 18-year-old Sunisa Lee. She would have qualified with her ninth-place ranking, but the International Gymnastics Federation rules limit countries to two athletes per event in the finals.
Carey, who is from Phoenix, Arizona, secured her spot at the Games in a unique way. She won gold in the vault and floor competitions in the 2020 Melbourne World Cup and the 2019 Doha World Cup and Baku World Cup, securing her spot in Tokyo thanks to a new rule that is entirely separate from the USA Gymnastics selection process.
She deferred enrollment at Oregon State to train and compete in the World Cup Series leading up to the Olympics.
"After the 2017 World Championships is when I had my breakthrough moment," she said. "Winning silver on vault and floor really boosted my confidence and made me realize the Olympics is something I could go for."
Carey was already set to compete next week in both the vault and floor individual competitions, but she was not a member of the four-person American team that placed silver behind the Russian Olympic Committee on Tuesday. But now that she has a spot in the all-around, she is a medal contender.
In qualifiers, Carey scored 15.166 in the vault, 14.133 in the uneven bars, 12.866 in the balance beam and 14.100 on the floor. She placed second in vault and third in floor.
On Instagram, she called it "the beginning of the experience of a lifetime."
Carey is capable of landing the most difficult tumbling pass ever performed by a woman — a layout triple-double. If she lands it successfully at the Games, it will be named after her.
Not even Biles has attempted the move in competition. The floor exercise skill involves a roundoff, a series of back handsprings, two backflips and three twists.
Most parents are watching from home as their children compete, but as her coach, Carey's father, Brian Carey, is by her side in Tokyo.
"We've been through it all together. The ups, the downs, the good the bad," she wrote to her dad on Instagram last year. "You've shown me how to spread my wings and in myself believe. I can't wait to finish this journey of ours, we're almost there."