Winner of the 1963 British Open, he followed up a first round 80 with a 78 today, to miss the cut by nine shots.
Charles, 74, who won the event in 1989 and 1993, was invited to compete in a quality field including defending champion Loren Roberts, Tom Watson, Tom Lehmann, American Ryder Cup captain Corey Pavin and four of the last five European Ryder Cup captains, Ian Woosnam, Mark James, Bernhard Langer and Sam Torrance.
He yesterday told NZPA it would be his final international event, other than playing in the Legends of Golf for the next few years.
He ended the day 20 shots off the lead held by Pavin, who still plays regularly on the PGA Tour in the United States.
Charles was two over on the front nine, but took a triple bogey on 10. He birdied 14, and finished with a double on the difficult 18th.
It has been a sentimental return to Carnoustie for Charles who first played the course in the 1968 British Open when he finished joint runner-up with American great Jack Nicklaus, two strokes behind South African Gary Player.
Charles captured 65 tournaments in his career starting with the 1954 New Zealand Open as an 18-year old amateur and capping it with his 1963 British Open triumph at Royal Lytham and St Annes -- the first major championship win by a left-hander.
His last international success was in 1996 when he won the Maui Kaanapali Classic in Hawaii on the US Champions Tour.
In 2007 he became the oldest golfer to make a cut on the European Tour at the New Zealand Open at Queenstown.
Charles shot a 68 in the second round, beating his age by three strokes and went on to finish in a tie for 23rd place.
Charles indicated that after competing at Carnoustie he will return home to his Canterbury farm.
