Palace have won just one of their last 12 games - at home to Liverpool on November 23 - with the 3-1 Boxing Day defeat to Southampton seeing them slip into the relegation zone.
Warnock, 66, returned to Palace in August following the departure of Tony Pulis two days before the start of the season, but has paid the price for winning just three of his 17 games in charge in south London.
"Crystal Palace football club can today confirm that Neil Warnock has been relieved of his duties and is no longer first-team manager," read a Palace statement.
"The club would like to put on record its thanks to Neil for all his hard work and energy over the past four months. Keith Millen will lead the team against Queens Park Rangers on Sunday as caretaker manager."
Warnock originally left Palace in 2010 after they went into administration, joining QPR and taking them into the Premier League before being sacked eight months later in January 2012. The following month he was appointed manager of Leeds United, only to be fired just over a year later.
Speaking after the defeat to Southampton, Warnock accepted he would face fierce criticism from fans for Palace's recent form.
"When you lose a game you're responsible. I have no complaints, at 3-0 down, you'd be very surprised not to get a bit of stick. I thought the players were very good today in the circumstances, they were almost as shell-shocked as some of the fans," he said.
"If I was a player today I'd blame the manager, it's always easy to do that. The players know what I feel. We need everyone to be on top of their game. The goals are so poor."
Alan Irvine at West Brom has admitted his position in charge is also uncertain after a sixth defeat in eight games left his side two points off the relegation places.
Chairman Jeremy Peace sacked Steve Clarke this time last year after a poor run of results and Irvine has been under near constant pressure from fans since his appointment in the summer.
West Brom were fortunate to emerge from their Boxing Day encounter with Manchester City with a 3-1 defeat and Irvine is aware his job is under scrutiny.
‘The chairman will make a decision as far as that’s concerned, and I can’t control it,’ conceded Irvine. ‘Can I be confident? Not necessarily. Because I don’t know what the thinking is.
‘All I can do is work as hard as I do and try to get the right kind of performances and results. I work extremely hard and leave nothing to chance.’
You have to think Warnock won't be the last Premier League boss to go this month never mind this season with two more rounds of games in quick succession.