Mozilla co-founder Brendan Eich is stepping down as chief executive and leaving the company following protests over his support of a gay marriage ban in California.
The non-profit firm, which makes the Firefox browser, infuriated many employees and users last week by naming Eich head of the organisation.
At issue was Eich's US$1,000 donation in 2008 to the campaign to pass California's Proposition 8, a constitutional amendment that outlawed same-sex marriages.
The ban was overturned last year when the US Supreme Court left in place a lower-court ruling striking down the ballot measure.
Eich's contribution had drawn negative attention in the past but took on more weight when he was appointed chief executive.
Mozilla employees and users criticised the move on Twitter and elsewhere online.
The departure raises questions about how far corporate leaders are allowed to go in expressing their political views.
"[Chief executives] often use their station to push for certain viewpoints and get some muscle for those viewpoints," said University of California at Los Angeles management professor Samuel Culbert. "But if you are going to play the game, you have to think of both sides."
Company leaders had to be conscious of what impact their own views might have on the success of their firm, Culbert argued.
While some leaders have been outspoken in their political positions, it is often in line with the ethos of their company.
Culbert said taking a position that was divisive could drive away customers and hurt employee morale.
The onus was also on the corporation and its board to assess whether anything that a candidate had done or said in the past would adversely affect the company's reputation, Microsoft chairman John Thompson said. "When you run a public company or any visible organisation, what you think and what you say is always going to affect the company," he said.
Eich said on Thursday that Mozilla's mission was "bigger than any one of us, and under the present circumstances, I cannot be an effective leader".
His resignation represents an about-face from his remarks in an interview published earlier this week by technology news service Cnet.
Insisting that he was the best choice to be chief executive, Eich told Cnet that it would send the wrong message if he were to resign or apologise for his support of Proposition 8.
"I don't think it's good for my integrity or Mozilla's integrity to be pressured into changing a position," he said. "If Mozilla cannot continue to operate according to its principles of inclusiveness, I think we'll probably fail."
Mozilla chairwoman Mitchell Baker apologised for the company's actions on Thursday. "We didn't act like you'd expect Mozilla to act. We didn't move fast enough to engage with people once the controversy started. We're sorry. We must do better," Baker wrote.
She said Mozilla believed both in equality and freedom of speech and "figuring out how to stand for both at the same time can be hard".