The Blades were hammered 5-0 at Ipswich on Friday to leave them rooted to the bottom of the table without a single point.
They were also dumped out of the League Cup by Birmingham.
The 42-year-old Selles only replaced Chris Wilder in June, signing a three-year deal.
According to reports, Wilder is set to return as the Spaniard's replacement in the Bramall Lane dugout.
Wilder left the club after leading them to the Championship play-off final, where they came within minutes of booking an immediate return to the Premier League.
"Sheffield United Football Club's board of directors have opted to make a change at managerial level," the club said in a statement.
"After a disappointing start to the EFL (English Football League) Championship campaign, Ruben Selles has been relieved of his duties as manager.
"Following a review of recent performances, and taking into account the feelings of supporters, the timing of the change has been made to give the club the best possible opportunity to improve the current league position."