NPR reported its move on its website. It said Williams appeared on the "The O'Reilly Factor" on Monday and told host Bill O'Reilly that he gets worried and nervous when he sees people dressed in Muslim-style clothes on airplanes.
NPR said it had notified Williams that his contract was being severed. The statement says Williams' remarks "were inconsistent with our editorial standards and practices, and undermined his credibility as a news analyst with NPR."
A phone message left for Williams at his home seeking comment was not immediately returned Thursday morning.