The Chicago festival tweeted that "Lollapalooza was founded on diversity, inclusivity, respect, and love.
"With that in mind, DaBaby will no longer be performing at Grant Park tonight."
The rapper has been widely condemned for homophobic and derogatory comments he made about HIV and gay men.
While performing at Rolling Loud festival in Miami on 25 July, he urged the audience to "put your cell phone light up", apart from those who were HIV-positive or were gay men who had sex in car parks.
He also wrongly claimed that HIV and other sexually transmitted diseases would "make you die in two or three weeks".
Medication helping those with HIV to live long, healthy lives has been available for decades.
Lollapalooza said rapper Young Thug would fill DaBaby's slot on Sunday night.
The BBC is not responsible for the content of external sites.
View original tweet on Twitter
Earlier this week, DaBaby was dropped from a benefit concert for the Working Families Party, a US political party that says it wants "freedom and equality for all".
Read More (...)