Former Villarreal coach Juan Carlos Garrido was being lined up to replace Mel, who had just started his fourth season in charge at the Benito Villamarin, local media reported.
Betis finished seventh last season and qualified for the Europa League but competing in two competitions appears to have taken a toll on the squad and they have won just two La Liga games and have only 10 points.
"The board of directors, after extensive deliberation, has decided to dispense with the services of Pepe Mel as coach of Real Betis," president Miguel Guillen said on the club's website (www.realbetisbalompie.es).
"It is a sad and painful decision with the sole objective of ending the run of poor results that we have been suffering for many weeks," he added.
Mel, 50, a colourful character who writes mystery novels in his spare time, took charge at Betis in 2010 and helped them win promotion back to the top flight in his first season.
He has also had stints at Tenerife, Getafe and Rayo Vallecano.