The People Picker in SharePoint is quite clever and confusing. The reason is that it brings in results from more than one source.
It pulls information from:
- The Site Collection User Information List (UIL)
- The Profile Database (User Profile Service Application)
- Active Directory
So, the only way to remove a user from the People Picker is to make sure you have removed them from all 3 locations. Let’s start at the bottom of the list. Active Directory is usually where users are deleted from first. You can delete the users from the Profile Database using the Central Administration UI for the User Profiles Application.
Most people expect that they would not show up in SharePoint anymore, but that is not the case because once a user accesses a site collection in SharePoint they are added to the UIL (User Information List). This is basically a list of users that have accessed SharePoint that the People Picker also uses also. You will need to remove them from the UIL if you don’t want them to show in the People Picker. To do that you can check out an excellent post here that tells you how to do it using PowerShell or using the UIL interface. The UI is hidden, but can easily be located by going to the root of your SharePoint installation and appending _catalogs/users/simple.aspx. An example would be http://mysp/_catalogs/users/simple.aspx. The UI is ok if you don’t have a lot of users, but if you do, paging through results can be very time consuming. In that case, I would recommend the PowerShell route.