Cardiff Central MP Jenny Willott quit her post as a ministerial aide to vote against the government on tuition fees.
Ms Willott, parliamentary private secretary to Lib Dem Energy Secretary Chris Huhne, said the decision was "extremely difficult".
She quit before a vote to raise a cap on tuition fees for students from England to a maximum of £9,000 a year.
The Welsh Assembly Government is to protect students living in Wales from fee rises.
In a statement, Ms Willott said: "Having considered the motion and discussed the issue with my constituents, my local party and my parliamentary colleagues, I will be voting against tonight's tuition fee motion.
"I believe that many aspects of the proposals are better than the current system, including abolishing up-front fees for part-time students and generous support for young people from less privileged backgrounds. However, overall I cannot support the package."
In all, three ministerial aides resigned over the issue - as the fee rise passed by a majority of 21 votes in the Commons.
Ms Willott said she remained "fully supportive" of the coalition, Nick Clegg and Chris Huhne.
"Together, we are delivering progressive, Liberal Democrat policies in government and I am proud of what we have achieved so far," she said.
"My decision to resign as PPS and vote against the government was extremely difficult. However, I fully respect the individual decisions that each of my colleagues has made.
"I remain fully committed to supporting the coalition government and I'll continue to fight for the people of Cardiff Central and Wales, albeit from the back benches."
Ms Willott, 36, was first elected in 2005 in Cardiff Central, a constituency with a large student population and which includes Cardiff University.
She had previously said she was considering taking up an offer from the party leadership to abstain, but minutes before voting began in the Commons late on Thursday afternoon, her resignation was announced.
While in the Commons she has served as a Lib Dem spokeswoman on youth affairs, justice, works and pensions and as a whip.
In Wales, basic tuition fees will rise to £6,000 per annum, or £9,000 in some circumstances.
But the assembly government will meet the cost of extra fees for students from Wales attending any UK university.
Jonathan Edwards, Plaid Cymru MP for Carmarthen East and Dinefwr, said: "We expect nothing better of the Tories but the Lib Dems have U-turned yet again on their principles.
"They have betrayed the trust of young people and future generations by breaking their promise to fight against increasing tuition fees."