Newcastle defender Taylor has an Achilles problem.
The player will be on the 23-player final squad list that will be submitted to UEFA tomorrow, and a replacement will be named.
Stuart Pearce's England youngsters begin their campaign against Finland on June 15 in Halmstad, and also face group games against Germany and Spain.
Taylor Pulls Out Of England Squad!
Provisional England Under-21 squad: Joe Hart (Manchester City), Joe Lewis (Peterborough), Scott Loach (Watford); Martin Cranie (Portsmouth), Kieran Gibbs (Arsenal), Michael Mancienne (Chelsea), Nedum Onuoha (Manchester City), Micah Richards (Manchester City), Andrew Taylor (Middlesbrough), James Tomkins (West Ham); Lee Cattermole (Wigan), Andrew Driver (Hearts) Craig Gardner (Aston Villa), Adam Johnson (Middlesbrough), James Milner (Aston Villa), Fabrice Muamba (Bolton), Mark Noble (West Ham), Jack Rodwell (Everton); Theo Walcott (Arsenal), Gabriel Agbonlahor (Aston Villa), Frazier Campbell (Manchester United).