Saudi Arabia's team coach Jose Peseiro
The Saudi federation said that Nasser Al Johar will take over for the remainder of the showpiece event in Doha.
"We have sacked Jose Peseiro after the loss today and appointed Nasser Al Johar to continue our mission at the Asian Cup," said the Saudi Football Association in a statement.
The Saudis, three-time champions, had been expected to compete for the title alongside the likes of Japan, Australia and South Korea, but a brace from Abdulrazak Al Husein consigned them to defeat against Syria.
Peseiro had faced heavy criticism after failing to steer his side to the World Cup last year and has had tetchy relations with the Saudi press ever since.
Al Johar, a Saudi national, has coached the national team before.
He took over at the 2000 Asian Cup when the Saudis fired Milan Macala in similar fashion to Peseiro after defeat in their opening game, and helped steer them to the final, where they lost to Japan.
He was also at the helm during the 2002 World Cup and took over again in 2008 when Helios Dos Anjos was let go, only to resign in February 2009 when the Green Falcons lost to North Korea in World Cup qualifying.