Hatch said he had no concerns about Lee's stance.
"That's his right," Hatch said. "I don't have a problem with that."
His campaign downplayed the significance of Lee's decision.
"What it says is, 'I'm new in this job, and I'm going to let the voters make their own decision on who they want,' " said Hatch campaign manager Dave Hansen. "My experience is, with delegates especially, endorsements don't mean a lot."
He pointed to Mitt Romney's endorsement of Sen. Bob Bennett, which included an appearance at the 2010 state GOP convention. Bennett didn't survive the convention vote.
Still, University of Utah political scientist Matthew Burbank said Lee's decision is "noteworthy," particularly because of his stature in the state's tea party circles, which could play a major role in the 2012 race. He wondered if Lee's decision is at least a signal that he isn't convinced of Hatch's conservative credentials.
"This may be more about saying, 'I'm not sure Senator Hatch is sufficiently tea party for my purposes,' " Burbank said.
Lee's spokesman, Dan Hauser, said that's not the case and people shouldn't assume the freshman senator's decision had anything to do with his feelings about Hatch.
"In any race an incumbent is involved in, we are going to stay neutral," Hauser said. "The lesson that can be learned from our race is that endorsements can fracture the party."
Lee survived a hard-fought state convention to face Tim Bridgewater in a Republican primary, which Lee won on the way to claiming the seat in November. Some of Lee's supporters made it clear that, after defeating Bennett, they wanted to take aim at Hatch next.
Hatch has spent considerable energy reaching out to the right wing of the Republican Party, meeting with tea party groups in Utah, attending a tea party town hall in Washington and working the crowd Friday at the massive convention of the Conservative Political Action Committee.
Hauser said if Hatch wins the Republican nomination, Lee will support him "100 percent." And Lee said his decision isn't a reaction to Hatch's support of Bennett in the past campaign, which is commonplace for senators from the same party and the same state.
So far Rep. Jason Chaffetz and state Sen. Dan Liljenquist have expressed an interest in the race on the GOP side.
Thomas Burr contributed to this report.