Hitting coach John Vukovich was named to manage today's doubleheader against St. Louis. Green would not say who he was considering as Frey's permanent replacement.
Third-base coach Don Zimmer, a close friend of Frey, also was dismissed.
"I think he did everything in his power to help the players and to help the organization get back on the winning track," Green said of Frey, who led the club to the division title in 1984. "Unfortunately, it was my opinion that whatever he was doing at this stage of the game wasn't getting the job done.
"I have a lot of respect for Jim Frey. If anybody thinks this job of replacing managers is easy, I dare him to get up here and try to do it."
The struggling Cubs (23-33) are 16 1/2 games behind the front-running New York Mets and only one-half game in front of last-place St. Louis.
The Cubs just came off a 3-7 trip, including a three-game sweep by the Pittsburgh Pirates. The Pirates, who lost 104 games last year, have beaten Chicago seven of eight times this season.
The decision to fire Frey came after Tuesday night's loss to Pittsburgh, Green said. He denied any plans to take over the team himself, as he did in 1980 when he stepped down to the field from the front office and led the Philadelphia Phillies to the World Series.
"I'm not in that business anymore," he said. "I'm not going to do that anymore."
Green ordered a mandatory workout for the players Thursday morning without Frey's knowledge. It was then that he told the players about his decision.
Before Green's news conference, Frey, 54, said he was not given a list of reasons for his dismissal.
"The manager has to take responsibility, and we were not doing the job on the field," said Frey, the NL Manager of the Year in 1984.
Asked if the team quit on him, Frey said, "If they quit, they quit on me, Dallas Green, the team, their mothers and the Lord."
Frey compiled a 196-182 record in his stint with the Cubs.