Pistons General Manager Joe Dumars fired Carlisle, who had one year left on his contract and led them to the best record in the Eastern Conference this past season.
Speculation is swirling that Dumars will hire Larry Brown, who resigned as coach of the Philadelphia 76ers last Monday.
Carlisle guided the Pistons to a 4-2 series victory over Brown's 76ers in the Eastern Conference semifinals.
But in their first trip to the Eastern Conference finals since 1990, the Pistons were swept by the New Jersey Nets.
The Pistons won the Central Division title in each of Carlisle's two seasons with 50-32 records.
But after Detroit fell into a 3-1 hole in the opening round of the playoffs against the eighth-seeded Orlando Magic, questions began to arise about Carlisle's job security. However, the Pistons rallied to win the final three games of that series and disposed of the 76ers in six games.
In his first season with Detroit, Carlisle orchestrated an 18-game turnaround from the previous campaign and was rewarded with NBA Coach of the Year honors.
A berth in the NBA Finals will likely be Dumars' expectation in 2003-04. The new coach will inherit a 50-win team that owns the second overall pick in the June draft, a selection acquired in a trade with the Memphis Grizzlies.
The job in Detroit is the sixth coaching vacancy since the end of the NBA regular season.
Brown and Jeff Van Gundy are two of the higher profile coaches available.