Meeke was fourth overall after two stages but suffered a suspected throttle problem on the next stage which forced him out.
The Dungannon man had been faster that world champion Sebastien Loeb on the opening stage.
Meeke may race in Saturday's stages but is now out of overall contention.
The works Mini team member will be handed time penalties for missing Friday's remaining stages which will drop him way down the field.
MINI WRC Team technical mentor David Lapworth said Meeke could take penalty of positives from his performance over the opening two stages.
"We're a bit disappointed to have a problem so early on but I'm pleased with Kris's speed," Lapworth the WRC website.
"Kris was exactly where we expected him to be and his time on stage two ticked another box. He was very relaxed and felt comfortable so it's a shame what has happened to him."
Meeke's moment occurred approximately two kilometres into the 14.34-kilometre Alta Marmilla stage.
"He felt something braking for a fifth-gear corner," said Lapworth.
"We need to look at the data to understand what happened but he's paid the price by running wide onto some loose gravel. We're hoping he'll be out again tomorrow."
Meeke's team-mate Dani Sordo was eighth after three stages.
Loeb led Mikko Hirvonen by 2.7 seconds after four stages with Russian privateer Evgeny Novikov in third place in his Fiesta after Petter Solberg lost 40 seconds because of a technical problem on stage two.