It was unclear what Trump meant and the White House did not immediately respond to an emailed request for an explanation.
"After a thorough review of prior associations, I am hereby withdrawing the nomination of Jared Isaacman to head NASA," Trump wrote on his social media site.
"I will soon announce a new Nominee who will be Mission aligned, and put America First in Space."
Trump announced in December during the presidential transition that he had chosen Isaacman to be the space agency's next administrator.
Earlier on Saturday White House spokeswoman Liz Huston flagged that said Isaacman had been ditched.
"It is essential that the next leader of NASA is in complete alignment with President Trump's America First agenda and a replacement will be announced directly by President Trump soon," she said.
Isaacman, 42, has been a close collaborator with Musk ever since buying his first chartered flight on Musk's SpaceX company in 2021.
He is the CEO and founder of Shift4, a credit card processing company. He also bought a series of spaceflights from SpaceX and conducted the first private spacewalk. SpaceX has extensive contracts with NASA.
The Senate Commerce, Science and Transportation Committee approved Isaacman's nomination in April and a vote by the full Senate was expected soon.
Musk lamented Trump's decision, posting on the X site that, "It is rare to find someone so competent and good-hearted".
SpaceX is owned by Musk, a Trump campaign contributor and adviser who announced this week that he is leaving the government after several months at the helm of the Department of Government Efficiency, or DOGE. Trump created the agency to slash the size of government and put Musk in charge.
