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Al Ahli's board of directors, headed by Ahmed Al Sayegh, dismissed Croatian coach Branko Ivankovic.
Al Ahli sank 2 to 1 against Al Wahda on Saturday in the third round of the Prince Mohammed Bin Salman Cup.
Branco has been attacked in recent weeks by fans because of the volatility of his team.
Al Ahli has scored four points in three games in the professional league this season, placing seventh.
Ahli had signed Branco earlier this season for two seasons.
Branco coached Dinamo Zagreb in Germany, Hanover in Germany, Al Wahda from the United Arab Emirates, Persepolis in Iran, Shandong Longing in China and Iran at the 2006 World Cup.
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