World record cap-holder Lilly retires
Lilly finished with 130 goals in international matches, second only to former team-mate Mia Hamm in world and US history, and was also second with assists, setting up 105 goals.
"It has been great. There are no regrets," Lilly said. "The opportunities I've had to play with so many great players and be a part of so many great moments has been amazing."
The only player to see action in five FIFA Women's World Cups, Lilly also took part in the Olympics three times. She helped the Americans win the 1999 FIFA Women's World Cup and capture Olympic gold in 1996 and 2004.
"I told myself I would take until the end of the year to make a decision after some time off so I wasn't just retiring because of the long year and the fact that I was tired," Lilly said.
"I'm just at the point in my life with my family and career where it was the right time. I never knew what the right time was going to feel like, but I finally got there."
Lilly became the "Queen of Caps", the world's most-capped woman, by claiming her 152nd cap on 21 May 1998 against Japan at Kobe, passing Norway's Heidi Stoere's prior mark.
Lilly spent the past two seasons playing for the Boston Breakers of Women's Professional Soccer, the six-team USA women's elite league from which she is also retiring. She also played for the Breakers for three seasons in a prior USA women's league that folded.
The final international goal of Lilly's career came last May against Germany at Cleveland, Ohio.