Mallorca made a strong start to their campaign, winning three and drawing two of their opening five matches, but their form has since collapsed and Sunday's 3-0 defeat at Real Sociedad was the final straw for the club's board.
Acting president Lorenzo Serra Ferrer confirmed Caparros had been dismissed at a news conference on Monday.
"It's very hard announcing this news but we need a lift for the rest of the season and to try to secure our place in the top flight," Serra Ferrer said.
Gregorio Manzano, who was in charge at Mallorca when they won the King's Cup for the first and only time in June 2003, and former Real Madrid coach Bernd Schuster were being tipped by local media to take over.
Caparros was appointed in October 2011 after the resignation of Michael Laudrup and has also had stints in charge at Sevilla, Deportivo La Coruna and Athletic Bilbao.