It was the ninth time Underwood has been released since entering the NFL in 2009 as a seventh-round pick by Jacksonville.
Carolina signed Underwood to a two-year deal during the offseason in hopes that he would replace the speed of Ted Ginn Jr., who signed with Arizona in free agency, as the No. 3 receiver and return specialist.
The inconsistency Underwood has shown in making catches throughout his career remained an issue throughout offseason workouts and in training camp. In three preseason games he was targeted two times, catching one pass for five yards.
Underwood was scheduled to count $925,000 against the 2014 salary cap and $1,175,000 in 2015. The only guaranteed portion of his deal was a $300,000 signing bonus.