Taylor, who took over at Adams Park 16 months ago, guided the Chairboys to automatic promotion from League Two last season.
But the team have failed to adapt to life in the higher division so far with just one win from their opening 11 matches to sit one place off the bottom of the league – only Southampton, who were deducted ten points at the start of the season, are below them.
Club owner Steve Hayes said: 'Peter is an honourable man and he knew that it was time to move on.
'He came to me and said he was very disappointed with the way the season has begun and understood that things had to change.
'He leaves with our thanks and best wishes for the future and I want to place on record our gratitude for the excellent job he did for us last season in getting us promoted.'
However, Wanderers fan Daniel Barnes believes Taylor has been a victim of circumstance.
He told inthenews.co.uk: 'We played several of the big names early on in the season - Charlton, Leeds and Norwich - and it knocked us for six really.
'We've struggled since then and confidence has gone, so I think Taylor moving on is probably the best thing for everyone.
'Hopefully this has happened early enough that we can still salvage our season.'
Despite Wycombe's current position, Hayes said he expects 'plenty of high-calibre applicants' to put their names forward for the job and highlighted the club's 'reputation for appointing good managers' as a reason for optimism.
'Peter's successor will inherit an excellent squad of players and, with 35 games still to play, we're confident our league position will improve,' he added.
Taylor's assistant Junior Lewis also leaves the club, meaning head of youth development Richard Dobson takes temporary charge of the first team for Saturday's League One fixture at fellow strugglers Gillingham.
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