Katrina Hacker will replace her at the event, which runs Feb. 23 to March 1 in Sofia, Bulgaria. Hacker finished sixth at this year's national championships.
Nagasu has been bothered by a right ankle injury she suffered earlier in the season and has yet to fully recover. She finished a disappointing fifth while defending her title at the national championships in January.
"After the U.S. Championships, I met with my doctor and was advised to take some time off to heal," Nagasu said. "It was a very hard decision to make, but my doctor and I agreed that it was in my best interest.
"I haven't been on the ice since U.S. Championships. It's not bad, but I'm not going to step back on the ice until we're confident that my pain is gone."
Last season, Nagasu was 14 years and 9 months old when she became the second-youngest U.S. champion to Tara Lipinski (1997).
Earlier this season, Nagasu finished fifth at Skate America and eighth at the NHK Trophy.
"I am very excited and honored to have the opportunity to compete at junior worlds," the 18-year-old Hacker said. "I wish Mirai a speedy recovery, and I hope to represent the United States as well as she would have."