The team and Gentry "have mutually agreed to part ways," a Suns statement said.
The NBA team is 13-28 this season.
An interim coach was to be named soon, the team said.
The Suns don't play again until Wednesday.
The 58-year-old Gentry, who became interim and then head coach in 2009, has a 158-144 record with the Suns.
Gentry was in the final year of his contract with the Phoenix club.
He previously coached Detroit, Miami and the Los Angeles Clippers.