Wolves suffered a crushing 3-0 defeat at Fulham on Saturday, extending their winless run to 10 league games with just two points from a possible 30.
They are eight points from the safety zone, having scored the fewest goals while they also have the league's worst defence.
Pereira's departure ends an 11-month spell in charge after he joined in December 2024, replacing Gary O'Neil with Wolves languishing in 19th place.
'We must make a change'
"Vitor and his team worked tirelessly for Wolves and helped guide us through a challenging period last season, for which we are grateful," Wolves' executive chairman Jeff Shi said in a statement.
"Unfortunately, the start to this season has been a disappointment and, despite our strong desire to give the head coach time and matches to find an improvement, we have reached a point where we must make a change."
Wolves' nightmare campaign has yielded a measly two points from 10 games, leaving them eight points adrift of the safety zone in what appears an increasingly desperate battle for Premier League survival.
They have scored the joint-fewest goals in the division while simultaneously boasting the league's leakiest defence.
Pereira becomes the fourth Premier League manager to face the axe this season, joining Nuno Espirito Santo (Nottingham Forest), Graham Potter (West Ham United) and Ange Postecoglou (Forest).
Wolves said all eight of Pereira's backroom staff had also left the club, and that under-21 head coach James Collins and under-18 head coach Richard Walker would take training until a new manager was appointed.
The Portuguese coach led them to safety with a run of six straight wins in March and April, finishing 17 points clear of the relegation zone.
Despite a poor start to the current campaign, Shi had publicly backed Pereira earlier this season, rewarding him with a new contract after last season's turnaround.
Pereira's exit marks his sixth straight year leaving a managerial post.
The Portuguese has had short-lived spells across five countries since 2020, managing Shanghai SIPG, Fenerbahce, Corinthians, Flamengo and Al Shabab before joining Wolves.
Check out the match report from Saturday's game with Flashscore.