The NBA team, on its Web site, said Chicago Bulls Executive Vice President of Basketball Operations John Paxson credited Skiles with helping "this franchise get back to respectability."
"This was a difficult decision to make but one that was necessary at this time," Paxson said in a statement.
There was no word on who would replace Skiles. The Bulls next play Wednesday in San Antonio.
Skiles put together a 165-172 record and three playoff appearances since taking over as the Bulls' coach on Nov. 28, 2003. This season Chicago is 9-16 and last in the NBA's Central Division.
In addition to five seasons with Chicago, Skiles coached three seasons at Phoenix. He has a career coaching record of 281-251.