The club announced Rene Meulensteen would take over responsibility for the first team, stepping up to the top job having only been recruited last month as head coach to assist Jol.
Fulham were beaten 3-0 at Upton Park and after 13 games of the Premier League season they stand 18th, inside the relegation zone.
Fulham chairman Shahid Khan said in a statement on the club's website: "Today I spoke with Martin to thank him for his efforts on behalf of Fulham Football Club over the past three seasons and, in particular, since my becoming chairman earlier this year.
"Martin was very gracious and I appreciate his understanding of the situation. There is no question Martin is an excellent football man and he has my utmost respect for the commitment he made to our club.
"However, our poor form and results this season are undeniable, and Fulham supporters deserve better. With more than half the season still ahead, an immediate change was necessary."
Fulham's dismal run has included Premier League losses to Southampton, Manchester United, Liverpool, Swansea and West Ham, and a Capital Oner Cup exit at Leicester.
Many supporters had been on Jol's back, calling for change, and Khan decided the London derby loss marked breaking point.
Jol's fellow Dutchman Meulensteen spent many years at Manchester United, initially working within the club's academy but graduating to become first-team coach under Sir Alex Ferguson in 2008, a post he held until the Scot retired at the end of last season.
A short stint in charge of Russian side Anzhi Makhachkala followed, and Meulensteen was strongly linked with Crystal Palace before Tony Pulis took over at Selhurst Park.
"Rene Meulensteen was brought to Fulham to assist Martin and today was offered the challenge and opportunity to step in for Martin," Khan said.
"I thank Rene for accepting and now we move forward. I have great confidence in Rene and high expectations for our squad to respond."
Meulensteen is relishing his first crack at being a Barclays Premier League manager.
The 49-year-old's first match in charge will come when Fulham face Tottenham at Craven Cottage on Wednesday.
Meulensteen said: "I appreciate the faith Mr Khan has put in me and will do my very best to honour his trust.
"We aim to get Fulham back on track, starting Wednesday night."
Jol's stint lasted almost two-and-a-half years, but the team struggled badly in his third term at the helm.
They began the campaign by winning at Sunderland, but Stoke and Crystal Palace have been their only other league conquests.
"It was a privilege to manage Fulham, one of the great clubs in the Premier League or anywhere in the world," Jol said.
"I am disappointed in this season but know there are better days ahead for Fulham and its supporters. I will always treasure my experience here and want to thank Mr Khan and everyone at Fulham for the opportunity."
