Thibodeau, the 2010-11 NBA Coach of the Year, was dismissed even though he had two years and around $9 million remaining on his contract, and led the team to the playoffs each season.
In a statement, the coach thanked Bulls owner Jerry Reinsdorf, reaffirmed his love of basketball, and said he was excited about his future with USA Basketball.
"We are proud of our many accomplishments, fought through adversity, and tried to give our fans the full commitment to excellence," Thibodeau said.
But the Bulls advanced past the second round of the playoffs only once, losing to the Miami Heat in the 2011 Eastern Conference finals. This season, Chicago went 50-32 and earned the Eastern Conference's third seed, but the Bulls lost to the Cleveland Cavaliers in the Eastern semifinals.
"While the head of each department of the organization must be free to make final decisions regarding his department, there must be free and open interdepartmental discussion and consideration of everyone's ideas and opinions," Reinsdorf said.
"These internal discussions must not be considered an invasion of turf, and must remain private...When everyone is on the same page, trust develops and teams can grow and succeed together. Unfortunately, there has been a departure from this culture.
"To ensure that the Chicago Bulls can continue to grow and succeed, we have decided that a change in the head coaching position is required. Days like today are difficult, but necessary for us to achieve our goals and fulfill our commitments to our fans."
Reinsdorf also thanked Thibodeau in the statement and said he "respected his love of the game."
Thibodeau compiled a 255-139 record in his tenure with the Bulls, including a 23-28 playoff record.
"When Tom was hired in 2010, he was right for our team and system at that time, and over the last five years we have had some success with Tom as our head coach,” Chicago Bulls general manager Gar Forman said in a statement. “But as we looked ahead and evaluated how we as a team and an organization could continue to grow and improve, we believed a change in approach was needed."
ESPN's Dave McMenamin reports that security escorted Thibodeau from the United Center.
- Scooby Axson