The congresswoman received a standing ovation and series of tributes from colleagues. Democrats and Republicans hugged and held hands as Giffords submitted her resignation papers to House Speak John Boehner.
Giffords said she is stepping down to focus on her recovery, more than a year after being shot in the head in an assassination attempt in Tucson.
The Arizona Democrat stood in the well of the House as her close friend, Rep. Debbie Wasserman Schultz (D-Fla.), read her resignation letter.
"I couldnt prepare anything this morning because I knew that I would not be able to hold it together very well," she said with tears in her eyes. "I am so proud of my friend and it will always be one of the great treasures of my life to have met Gabby Giffords and to have served with her."
In the letter Wasserman Schultz read for Giffords, the congresswoman said she would return one day.
"Every day I am working hard, I will recover and return. And we will work together again for Arizona and for all Americans. Sincerely, Gabrielle Giffords."
On the House floor, there was nothing but praise for Giffords. It was a rare chance to see politicians shed their political personas for a touching personal moment.
"And I will say once again Mr. Speaker, Congresswoman Gabby Giffords' strength against all odds serves, and will continue to serve, as a daily inspiration to all of us," said Rep. Eric Cantor (R-Va.).
"The House of Representatives of America has been made proud by this extraordinary daughter of this house, who served so well during her tenure here, who felt so deeply about her constituents and cared so much for her country," said Rep. Steny Hoyer (D-Md.).
Giffords' mother and husband, NASA astronaut and retired Navy Capt. Mark Kelly, watched from the gallery.
During Tuesday's State of the Union address, Giffords received a 90-second standing ovation. President Barack Obama hugged her as he made his entrance, and then kissed her on the cheek.
Giffords voted on one last bill, a measure she co-authored to impose tougher penalties on drug smugglers, before handing in her resignation letter.
Arizona's governor will now set a date for a special election to replace the congresswoman. That is expected to take place this spring or summer.
The Associated Press contributed to this story.