Under his leadership, the party fielded a candidate in every federal, statewide and state Senate race on the 2004 election ballot, but made only minor inroads, gaining one state Senate seat and winning two high-profile races in Salt Lake County.

Statewide, Utah once again elected a Republican governor and gave President Bush his largest margin of victory in the country.

Dunn will leave the state party to become president of Vigilant, a St. Louis-based company specializing in lobbying state and local governments. He will also be married in June to Salt Lake County Democratic Party Chairwoman Nichole Adams.

"It really is just a great opportunity for me, with this job opportunity and timing in my life and getting married in June," Dunn said. "That's really kind of what the decision was based on and it's a time where things are going well with the party."

Dunn said he worked hard to help nurture the county parties, bulk up e-mail lists and cultivate small-dollar donors.

He will continue to serve as chairman until the party elects a new leader May 7. It's not clear who might campaign to fill the vacancy, although the competition could become a power struggle between the liberal and moderate wings of the party.

U.S. Rep. Jim Matheson, the state's most prominent elected Democrat, said the new chairperson should be someone who follows the blueprint he has laid out for Democrats to survive in the Republican state.

"Democrats can win in Utah. I've proven that and the approach I've taken and the issues I've emphasized are critical to that," he said. "There is a successful model out there and our party leadership needs to understand the effectiveness of that."

Dunn, a former White House staffer under President Clinton, unsuccessfully challenged Rep. Chris Cannon in 2000 and lost a Democratic congressional primary in 2002 before running for state party chairman in 2003, when he defeated three-term chairwoman Meg Holbrook.

Pat Shea, a former director of the Bureau of Land Management during the Clinton administration and a Democratic candidate for governor and Senate, said Dunn modernized the party's operations, using new, effective tactics on direct mail, telephone banks and databases.

"In net, he was very good and put energy into the party that really needed it," said Shea.

On the downside, Shea said, Dunn was "quick to be in the public eye," which can rub some the wrong way, and he was unable to get Democratic candidates unified in their message. "There was a cacophony rather than a symphony," Shea said.

Democratic County Councilwoman Jenny Wilson said Dunn was a strong tactician who revitalized the youth of the party. State House Minority Leader Ralph Becker also praised him.

"Donald has been a very energetic and dynamic chair. He's done a lot of good things for the party. I hope we are able to find good candidates to replace him," said Becker.

Dunn has been criticized recently for his association with Truth In Politics, a shadowy political action committee (PAC) that spent more than $100,000 sending mailers to Salt Lake County voters, alleging corruption in county government and the Legislature. Dunn acknowledged selling a mailing list to the group and that the group's senior advisor also did work for the party.

State Sen. Al Mansell, R-Sandy, who has asked the Utah attorney general to investigate the group, said if Dunn's involvement in the group didn't prompt him to quit, "it should have."

But Dunn said the furor over the PAC didn't contribute to his decision to leave the state party.

"To be very honest with you, I think there are some that think, 'Donald has been so partisan,' " he said. "Well, that's my job. We did some things this year beating up on the Republicans directly and other groups doing it. I think that surprised some people, but that really has no effect on my decision or what I'm doing."

Mansell said Democrats would do better with a leader who is willing to work with Republicans.

"He's very aggressive and I believe the parties work better when they get people to sit down and work stuff out," Mansell said.

Democratic Salt Lake County Councilman Joe Hatch said Dunn easily would have won re-election had he run.

"We're sorry to lose him as chair. There has been nothing but kudos," Hatch said.

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Tribune reporters Thomas Burr, Derek P. Jensen and Rebecca Walsh contributed to this story.