The Latics lost 1-0 at home to fellow relegation candidates Bristol City on Saturday to leave them four points from safety with nine games remaining.
Former Manchester United Under-21 manager Joyce, 52, took over in November after Gary Caldwell's sacking but only won six of 24 games in charge.
Assistant manager Graham Barrow will take charge for the rest of the season.
"It is unfortunate that we have made this decision but with the team in such a perilous position in the league, we need to act now because we cannot afford to fall any further behind," said chairman David Sharpe.
"Results and performances have simply not been up to standard often enough in recent matches.
"Although we acknowledge the difficulties faced in managing a team in a league where we are competing against clubs with much larger budgets, the nature of some of our recent defeats, especially against close rivals, has fallen short in terms of what we as a club, and all our supporters, expect."
Former Bolton, Preston, Plymouth, Burnley and Hull City midfielder Joyce signed a three-and-a-half-year contract with Wigan, but has left along with first team coach Andy Welsh.
After winning the League One title last season, the Latics have struggled in the second tier, and are the lowest scorers, having failed to find the net in 10 of their last 14 home matches.
Barrow, 62, is a former Wigan midfielder and manager who returned to the club in 2009 to work as a coach under Roberto Martinez.

Researchers are preparing to contact all 6,400 families in the country affected by the condition.
Children who have a parent or sibling with type-1 diabetes will be invited for a blood test to see if they are at high risk of developing the disease.
Those at risk will be offered a drug called metformin to see if it can hold off diabetes.
Metformin is already used to treat diabetes, but it is not clear if it might prevent it from developing in the first place.
If successful, the study could challenge long-established thinking on what lies behind type-1 diabetes.
Type-1 diabetes develops when the body does not produce insulin. This is the hormone needed to control blood sugar levels.
Despite extensive research, there is no way of preventing the disease.
Most experts believe it is caused by a problem with the immune system - mistaking insulin-producing cells in the pancreas - called beta cells - as harmful, and attacking them.
This study, called the autoimmune diabetes Accelerator Prevention Trial (Adapt), tests an alternative theory developed by Prof Terence Wilkin, from the University of Exeter Medical School.
Rather than focusing on halting the immune system, Prof Wilkin says it could be better to work on protecting the beta cells.
He argues the key cause of damage is stress on the beta cells as they struggle to cope with demand for insulin.
Then, he says, in some people, the immune system kicks in, killing off more cells, accelerating the development of diabetes into childhood - what we know as type-1 diabetes.
He hopes metformin will relieve the stress on the beta cells, so they can continue to make insulin.
Prof Wilkin said: "It is possible that a modern environment accelerates the loss of beta cells by overworking and stressing them.
"As a consequence, this could be contributing to the rising incidence of type-1 diabetes, which is appearing in ever younger age groups.
"Adapt will use a medication to protect the beta cells from the stress, so that they survive longer."
The researchers say if it is successful, the trial will offer a cost-effective way of preventing type-1 diabetes that could be made available immediately to children at risk.
The trial has initial funding from the type-1 diabetes charity JDRF.
Scotland has the third highest rate of type-1 diabetes in the world, and a good system of record to identify affected families.
The study will start recruitment in Tayside and will then extend across Scotland before crossing into England.
There are two main types of diabetes:
Type-1 diabetes can develop at any age, but usually appears before the age of 40, particularly in childhood.
About 10% of all diabetes is type-1, but it is the most common type of childhood diabetes, so it is sometimes called juvenile or early onset diabetes
In type-2 diabetes, the body either fails to produce enough insulin to function properly, or the body's cells do not react to insulin. About 90% of adults with diabetes have type-2, and it tends to develop later in life than type-1.
Source: NHS Choices
Championship strugglers Wigan Athletic have parted company with boss Warren Joyce after only four months.
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A major trial is set to start in Scotland aimed at preventing type-1 diabetes in children.