He is the second top player to pull out of a previous commitment to Team USA in the past week, joining Anthony Davis.
Harden told the Houston Chronicle on Friday that he has informed coach Gregg Popovich of his decision and would use the extra time to focus on adapting to playing with new Rockets teammate Russell Westbrook.
Toronto Raptors star Kyle Lowry had surgery on his thumb this week in New York, but he is hoping to recover in time to play with the team.
The current roster has depth at guard, with All-Stars Damian Lillard, Kemba Walker and Bradley Beal among those still committed.
The event runs Sept. 1-15 at various cities in China. The tournament ends closer to training camps than it has in past years.
MacMahon: 'Smart move' by Harden passing on World Cup
Jorge Sedano, Tim MacMahon and Rachel Nichols analyze James Harden's decision to withdraw from playing for the USA National Team at the FIBA World Cup.
Kellerman: Harden will have to play off ball more with Westbrook
Max Kellerman suggests that James Harden will have to give the ball up to Russell Westbrook in order for the duo to work.