The all-female editorial board of the magazine, called "Women Church World", also quit.
The women said that the treatment of them as second-class citizens grew worse when they drew attention to sexual abuse of nuns by clergy.
The Associated Press reported the move after obtaining an as-yet open letter the magazine’s founder, Lucetta Scaraffia, wrote addressed to Pope Francis.
"We are throwing in the towel because we feel surrounded by a climate of distrust and progressive de-legitimization," Scaraffia wrote.
Scaraffia told the AP that the decision was taken after the new editor of L'Osservatore, Andrea Monda, told her earlier this year he would take over as editor. She said he reconsidered after the editorial board threatened to resign and the Catholic weeklies that distribute translations of "Women Church World" in France, Spain and Latin America, told her they would stop distributing.
"After the attempts to put us under control, came the indirect attempts to delegitimize us," she said, citing other women brought in to write for L'Osservatore "with an editorial line opposed to ours."
The effect, she said, was to "obscure our words, delegitimizing us as a part of the Holy See's communications."
Monda denied accusations that he sought to discredit the female editors. He said in a statement that he fully respected the autonomy of the women's insert.
He said at most that he suggested ideas and people to contribute to "Women Church World."
Scaraffia launched the monthly insert in 2012 and oversaw its growth into a stand-alone Vatican magazine as a voice for women, by women and about issues of interest to the entire Catholic Church. "Women Church World" had enjoyed editorial independence from L'Osservatore, even while being published under its auspices.
In the final editorial, the editorial board said the "conditions no longer exist" to continue working with L'Osservatore, citing its initiatives with other women contributors.
"They are returning to the practice of selecting women who ensure obedience," the editorial read. "They are returning to clerical self-reference and are giving up that `parresia' (freedom to speak freely) that Pope Francis so often seeks."
The departures are the latest upheaval in the Vatican's communications operations, following the abrupt Dec. 31 resignations of the Vatican spokesman and his deputy over strategic differences with Paolo Ruffini, prefect of the dicastery for communications.
Scaraffia, a history professor and journalist, is an avowed feminist who nevertheless toed the line on official doctrine. That doesn't mean she didn't ruffle feathers with her frequent lament that half of humanity -- and the half most responsible for transmitting the faith to future generations -- simply is invisible to the men in charge of the Catholic Church.
She stoked uproar in February when she denounced the sexual abuse of nuns by clergy and the resulting scandal of religious sisters having abortions or giving birth to children who are not recognized by their fathers.
The article prompted Francis to subsequently acknowledge, for the first time, that it was a problem and that he was committed to doing something about it.
The Associated Press contributed to this report.