The Kings got off to a surprising 5-1 start to the season but have lost eight of their past 10 -- a swoon that has coincided with star DeMarcus Cousins' bout with viral meningitis -- and have fallen to 11-13.
With Cousins off to an impressive start and the team electing to signRudy Gayto a three-year extension, the Kings appeared to be headed in the right direction.
But the Kings "expected more," and there was "no incident" that led to Malone's ouster,one source told ESPN.com's Ramona Shelburne.
Yahoo! Sports earlier reported news of Malone's dismissal.
Malone (39-67) was hired by Sacramento following the 2013 season. He was the team's first head coach since Vivek Ranadive took over primary ownership of the franchise from the Maloof family.
Assistant coach Tyrone Corbin will serve as the team's interim head coach, sources told ESPN.com's Marc Stein. Corbin went 112-146 in three-plus seasons as coach of theUtah Jazzand was not offered a contract after last season.
Corbin will be the team's seventh head coach since the franchise most recently made the postseason in the 2005-06 season.
Sacramento next plays Tuesday, when it hosts the Oklahoma City Thunder, who are tied with the Kings at 10th in the Western Conference.
The Kings have already broken ground on a $477 million arena that is expected to open downtown for the 2016-17 season.
Information from The Associated Press was used in this report.
Kings Fire Malone
Brian Windhorst discusses why he's surprised that the Sacramento Kings fired coach Mike Malone and who he thinks the likely long-term replacement will be.