Williams said she hurt the knee during Friday's win against Emilie Loit and was in too much pain to play. She was to face Elena Dementieva of Russia in the semifinal.
"My left knee always hurts, but this time it's my right knee,'' Williams said. "When I woke up this morning, it wasn't feeling good. I wasn't moving well at all in practice. It was just really no chance.
"Today I don't feel like I could have gotten there. I wanted to make the fans extremely happy. It wouldn't have been a good showing for me at all.''
Dementieva will play the winner of the match between Amelie Mauresmo and Jelena Jankovic.
"I've been playing a lot of tennis. Maybe it's just a sign that I need to take a day off or two and get ready for the next event,'' said Williams, who is set to play in the Dubai Championships next week.
"I'm gonna make the effort to play and be there,'' Williams said. "I just think I'll be OK. I just have to make sure it stays strong.''
Serena withdraws; Mauresmo, Dementieva in final
Luis Fabiano Leaves Sevilla For Brazil For Knee Rehabilitation
Ronaldo Talks Of Recovery A Year After His Horrific Knee Injury