Ex-Wigan Athletic man handed reins at Championship club
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The Hornets wielded the axe after they were beaten 2-1 at home by Coventry City to leave them 13th in the table, well adrift of the play-off places and only seven points above the relegation zone.
Ex-Barnsley and West Brom boss Ismael had been appointed to the job at Vicarage Road in May and signed a contract extension in October, but he has paid the price for a poor run of form.
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Hide AdIsmael was the 20th managerial appointment under the Pozzo family. Of his 41 games in charge, Watford won 12 and lost 15, with 14 draws.
A statement from the club on Saturday evening read: "Tom Cleverley will assume the position of interim head coach at Vicarage Road.
"This follows Watford FC terminating the contract of Valerien Ismael after today's home defeat to Coventry City.
"The Hornets thank Valerien and his staff for their dedication and commitment. However, the club's board considers it an appropriate time to make a change in order to improve results.
"Tom Cleverley's staff will be confirmed in due course."
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Hide AdFormer Manchester United and England midfielder Cleverley retired from playing last summer after six seasons with Watford and took up a role on the club's coaching staff.
Cleverley made 25 appearances, scoring four goals, for Latics during a season-long loan spell from United in 2010-11, helping Roberto Martinez’s men retain their Premier League status.