The Pirates are 2-7, 2-5 in Conference USA with two games remaining in the season.
"I want to thank the players, staff, families and the entire Pirate Nation for their support and kindness," said Thompson in a message on the university's Web site. "The bottom line is we didn't win enough games and we didn't have enough time."
Thompson was named the school's 18th all-time head football coach Dec. 20, 2002.
In 24 years in coaching, the Forrest City, Ark., native also has been a defensive coordinator at Florida, Alabama, Arkansas and LSU, and did a one-year stint as Florida's defensive coordinator, where he led the Gators to a top 25 national ranking in total defense.