The MacArthur Foundation, a U.S. group that promotes human rights, said on Wednesday it was closing its Moscow office after Russian parliamentarians put it on a list of non-desirable organizations.
It took the decision after Russia forced foreign-funded non-governmental organizations that engage in political activity to register as "foreign agents" and the Federation Council upper house approved a "patriotic stop-list" of undesirable groups.
Human rights campaigners and opposition politicians see the moves as part of a broader clampdown on civil society under President Vladimir Putin and have criticized what they say is a growing climate of fear.
"The recent passage and implementation of several laws in Russia make it all but impossible for international foundations to operate effectively and support worthy civil society organizations in that country," the MacArthur Foundation said in a statement.
"These laws, public statements by Russian legislators, and the vote by the Federation Council... make it clear that the Russian government regards MacArthur's continued presence as unwelcome."
Putin has warned against allowing the West to use local civil rights groups to foment unrest in Russia, but the foundation said it had never supported political activities or actions that could be considered undesirable.
"We are entirely independent of the United States government and receive no funding from it," it said.
Twelve NGOs were named on the "patriotic stop-list" which was approved by the Federation Council on July 8 and sent to the prosecutor general to consider whether they should be closed.
Two other groups - the Dynasty charitable foundation which sponsored science and education, and the Committee Against Torture - have said they will stop operating in Russia after being branded "foreign agents," a derogatory term dating back to the Cold War.
Groups that have been affected say being included on the "foreign agents" register attaches a stigma to them which makes it impossible to find sponsors and collaborators inside Russia, and they are also subject to burdensome official audits.
Opposition politicians say Putin has launched a crackdown on civil society since he returned to the presidency in May 2012 following street protests against him.
The Kremlin denies this.