The Liverpool right back picked up the injury in the second half of England’s 1-0 friendly win over Austria on Wednesday.
Alexander-Arnold was one of four right backs in Gareth Southgate’s squad alongside Reece James, Kieran Trippier and Kyle Walker.
The 22-year-old will spend up to six weeks on the sidelines and Southgate will only name a replacement after Sunday’s warm up game against Romania.
"Trent Alexander-Arnold has been ruled out of UEFA EURO 2020,” an official statement from the FA read.
"The Liverpool player sustained a thigh injury in the closing stages of Wednesday’s 1-0 win against Austria in Middlesbrough.
"A scan on Thursday confirmed the 22-year-old will be unable to play in the forthcoming tournament so he's withdrawn from the England squad.
"Gareth Southgate will not confirm a replacement until after Sunday’s return to the Riverside Stadium for the warm-up fixture against Romania."
Liverpool confirmed the bad news with a statement of their own which read: "Trent Alexander-Arnold has withdrawn from England’s Euro 2020 squad due to injury."
"The 22-year-old will immediately start a rehabilitation programme with a view to returning in pre-season as the Reds prepare for 2021-22."
Alexander-Arnold has won 13 caps for the England national team, scoring one goal.
