More than 30,000 organisations are accredited by the scheme, designed to improve and recognise good pratice in people management.
The regulator gained accreditation in 1999 but went into "retaining status" in 2005 after an assessment found it no longer met the scheme's standards.
Organisations that fail their assessments are given two years to address their shortcomings, but the Charity Commission has failed to do so, and withdrew voluntarily before losing its status.
"We decided not to go for a re-assessment this year as our own assessment showed that we had not yet reached the full revised standard," said a spokeswoman for the commission.
"We remain committed to achieving the Investors in People standard and will look to re-apply in the next two years."
She said there was "insufficient and inconsistent evidence" in five out of 10 indicator categories, including encouraging people to take ownership and responsibility, and continual improvements to the way people are managed and developed - two issues flagged up in the commission's own staff survey.
"We are focusing on working with staff through what is a period of considerable change and restructuring, following the confirmation of our funding in the Comprehensive Spending Review announcement," said the commission spokeswoman. The regulator's budget will be cut by 5 per cent every year for the next three years.