Capello took over last June after a dismal run under South Korean coach Choi Yong-soo left Jiangsu in the relegation zone and the 71-year-old Italian departs just three games into the new campaign.
He has been replaced by Romanian Cosmin Olaroiu, who led Al Ahli of the United Arab Emirates to the final of the Asian Champions League in 2015, where they lost to Chinese Super League champions Guangzhou Evergrande.
Jiangsu have won one and lost two of their opening fixtures this season, although Chinese media reported disagreements with the club's management rather than the team's form are the reason for Capello's departure.
Capello led Jiangsu to safety last season with the club eventually finishing 12th in the 16-team top flight of Chinese football.
He becomes the second coach to leave his position in the Chinese Super League since the season started last month. Dalian Yifang announced last week that Ma Lin would be replaced by former Real Madrid coach Bernd Schuster.
(Reporting by Michael Church; Editing by John O'Brien)
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