The Battle Creek, Mich.-based company said Thursday that Phelps's behaviorcaught on camera and published Sundayis "not consistent with the image of Kellogg."
The company put Phelps on boxes of its Frosted Flakes and Corn Flakes.
Phelps has kept the backing of many sponsors since the photos surfaced that showed him inhaling from a marijuana pipe.
Phelps's agent was not immediately available to comment.
Kellogg says its contract with Phelps expires at the end of the month.