"Walter Zenga’s contract has been terminated with immediate effect," a statement on the club's website said.
Stefano Cusin, Zenga's assistant, has also left, with first-team coach Rob Edwards put in temporary charge while the club conducts "a thorough process" to find a replacement.
Zenga was appointed in succession to Kenny Jackett on July 30, seven days before the start of the season and shortly before the club was bought by the Chinese conglomerate Fosun International.
Under Zenga, a former manager of Sampdoria, Wolves won just four of his 14 games in charge and lie 18th in the table.
Bookmakers named former England manager Sam Allardyce, a Wolves supporter, as early favourite to replace Zenga, along with former France manager Willy Sagnol.
(Reporting by Neil Robinson, editing by Pritha Sarkar)
