The White House shocked Washington by announcing that James Comey “has been terminated and removed from office”.
But Democrats said he was fired because the FBI was investigating alleged links between the Trump campaign and Russia.
The move came as it emerged Mr Comey gave inaccurate information to Congress last week about Mrs Clinton’s emails.
An FBI investigation into her use of a private email server to store sensitive information while secretary of state remains closed. Mr Comey said in July last year it was careless but not criminal.
The White House said the search for a successor for Mr Comey would begin immediately. In a tweet on Wednesday morning, Mr Trump said Mr Comey would be replaced “by someone who will do a far better job, bringing back the spirit and prestige of the FBI”.
It is only the second time the head of the FBI has been fired.
Why was James Comey fired?
President Trump wrote in a letter to Mr Comey that he agreed with US Attorney General Jeff Sessions’ recommendation that “you are not able to effectively lead the Bureau”.
Mr Sessions said the department of justice was “committed to a high level of discipline, integrity, and the rule of law”, and “a fresh start is needed”.
Many have expressed surprise that Mr Comey should be fired for his handling of the investigation into Mrs Clinton’s emails, given that Mr Trump once praised the FBI director’s conduct in the matter.
In the final days of the presidential campaign, Mr Trump told a rally it “took guts” for Mr Comey to reopen the inquiry. “What he did brought back his reputation,” Mr Trump said.
But on Tuesday, Deputy Attorney General Rod Rosenstein said he “cannot defend the director’s handling of the conclusion of the investigation of Secretary [of State Hillary] Clinton’s emails, and I do not understand his refusal to accept the nearly universal judgement that he was mistaken”.
“Almost everyone agrees the director made serious mistakes; it is one of the few issues that unites people of diverse perspectives.”
Mr Rosenstein also said:
- Mr Comey had been wrong to “usurp” the previous attorney general in July 2016 when he announced the Clinton emails inquiry should be closed without prosecution
- That he had compounded his error by “gratuitously” releasing “derogatory information” about Mrs Clinton
Mr Comey was addressing FBI agents in Los Angeles when, according to US media, he learned he had just been fired when he saw the news on television.
The 56-year-old – who was three-and-a-half years into his 10-year term as FBI director – reportedly laughed, thinking it was a prank.
What about the Russia investigation?
Democrats swiftly suggested that Mr Trump had fired Mr Comey to influence the FBI inquiry into whether members of the Trump election campaign colluded with the Kremlin.
The House of Representatives and Senate intelligence committees are looking into the same allegations but no conclusions have yet been reached.
“Were these investigations getting too close to home for the president?” Senate Minority Leader Chuck Schumer asked a Tuesday evening press conference.
“This does not seem to be a coincidence,” he added.
Mr Trump responded on Twitter that Mr Schumer had recently expressed his lack of confidence in the FBI chief.
President Trump has repeatedly insisted the Russia allegations are “fake news”. He and his Secretary of State Rex Tillerson will meet Russian Foreign Minister Sergei Lavrov in Washington later on Wednesday.