The world number one, who is being chased in the rankings by German Angelique Kerber, took a free entry only last week and was seeded atop the draw.
But the 34-year-old American reversed course abruptly and withdrew from the tournament on Monday.
“I’m very disappointed I’m not able to compete as I was really looking forward to defending my title,” Williams said.
“My shoulder inflammation continues to be a challenge, but I am anxious to return to the court as soon as possible.”
The absence of Williams now opens the door for Kerber to make a run at the WTA top ranking. Williams has been No. 1 for 183 straight weeks and 306 overall.
But Kerber can become number one if she wins the Cincinnati title.
Williams took a wild card spot to get into the draw. She will be replaced by lucky loser Misaki Doi of Japan.
Ukrainian Lesia Tsurenko defeated China’s Zhang Shiau 6-3, 6-3 while American CoCo Vandeweghe put out Italian Sara Errani 4-6, 6-3, 6-4. Croatian Donna Vekic shocked newly married former world number one Ana Ivanovic 6-4, 6-2.
In men’s play on a day interrupted by rain, France’s Julien Benneteau earned the first upset win of the week as he put out Spanish 10th seed David Ferrer 6-4, 2-6, 6-4.-AFP