Bosh will be replaced on the Eastern Conference squad by Atlanta center Al Horford.
Bosh has expressed eagerness in recent weeks to play in this year's game because it is being played in Toronto. Bosh played his first seven NBA seasons with the Raptors before leaving as a free agent to sign with Miami.
"I am honored to be selected to participate in the All-Star Weekend festivities, and will still be here to support my fellow East All-Stars," Bosh said in a team-released statement. "But I will also use this weekend to try to heal and focus on the second half of the Heat season."
The All-Star appearance would have been the 11th of Bosh's career. Bosh, who is averaging 19.1 points and 7.4 rebounds, didn't mention the injury while meeting with reporters earlier Friday.
Horford is making his fourth All-Star appearance. He is averaging 15.3 points and 6.9 rebounds this season.
Bosh also pulled out of Saturday's 3-point shooting contest. Portland guard C.J. McCollum was tabbed to replace him.