The NYPD investigation into the fatal mugging of Barnard College freshman Tessa Majors suffered a setback Saturday, with officials setting free one of the two young teen suspects in custody for the murder.

The 14-year-old boy, whose name is being withheld by The Post, had been the second kid arrested in the stabbing, but was sprung late Friday after the Manhattan DA’s office declined to prosecute him due to lack of evidence, law enforcement sources told The Post.

“He came in” to Morningside Heights’ 26th Precinct, said one source. “He lawyered up. They had to let him go,” the source said.

“He’s still a suspect,” another source said. “But they want more evidence. They want a stronger case.”

The first boy, Zyairr Davis, 13, remains in custody and charged with felony murder after police say he admitted being there at the scene of the Wednesday night mugging with two other boys — and allegedly copped to picking up a dropped knife and handing it to the teen who committed the fatal stabbing.

A third teen suspect has not been arrested.

On Saturday, the NYPD redoubled its efforts, looking for witnesses, dragging the pond at Morningside Park for a murder weapon and looking at DNA evidence, sources said.