At a press conference in the Oval Office, Ms Haley said she would be leaving her role as US ambassador to the UN by the end of the year. The departure has left plenty of people scratching their heads.
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| Nikki Haley has resigned as US ambassador to the UN |
Ms Haley is one of the administration's most popular figures, among Republicans and Democrats, and Mr Trump praised her as a "fantastic person" who has "done an incredible job".
So why is she stepping down now weeks before crucial midterm elections? Axios's Jonathan Swan broke the story of her resignation, and here's what he knows about her reason for quitting:
Plenty of questions then.
Here's some of the reasons being floated for her resignation.
Let's start with Ms Haley's official explanation
Ms Haley said the past eight years, six of which were spent as South Carolina's governor and two as the UN ambassador, had been intense.
"I am a believer in term limits. I think you have to be selfless enough to know when you step aside and allow someone else to do the job," she said.
Mr Trump told reporters she was resigning to "take a little time off".
Both explanations didn't really satisfy anybody.
On the timing of the announcement, CNN's chief White House correspondent Jim Ascosta reported that Ms Haley was concerned about resigning after the midterm elections, but also didn't want to step aside during Brett Kavanaugh's Supreme Court confirmation process.
She might want to make money in the private sector
According to CNN, Ms Haley's 2018 financial disclosure reported a significant number of outstanding debts including a million-dollar mortgage and a line of credit between $250,000 and $500,000.
The network reports that seven-figure salaries are waiting for someone with her experience in the private sector, compared to the comparatively modest salary she currently earns as a public official.
She could be planning a run for president
Ms Haley answered the question about a run in 2020 before reporters could even ask her about it.
She had been talked about as a vice-presidential candidate as far back as 2012, and it's long been speculated that she had eyes on the White House."I still don’t know what happened really. I mean, I reported she resigned , she told trump that last week. I still don’t know the real backstory nor does anyone really that I’ve spoken to in the White House or outside the White House..." - @jonathanvswan w/ @NicolleDWallace pic.twitter.com/nirLVGjBt8— Deadline White House (@DeadlineWH) October 9, 2018
Naturally, sitting next to the man who intends to be the Republican nominee in 2020, she quickly ruled out a run in two years time.
But two years is a long time in the Donald Trump era.
Who knows what could happen between now and 2020, especially with special counsel Robert Mueller yet to complete his investigation into Russian interference in the 2016 election.
And even if 2020 isn't an option, Ms Haley is only 46-years-old. A run in 2024 could absolutely still be on the cards.
Were there uncomfortable questions on the horizon?
Just this week, a Federal Government watchdog asked the State Department to investigate Ms Haley's use of private jets in seven instances last year.
The Post and Courier reports that the Citizens for Responsibility and Ethics in Washington asked the State Department to examine Haley's acceptance of the flights as gifts.
Similar scandals eventually led to the resignations of two other Trump cabinet members, Scott Pruitt and Tom Price.
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