Democrats suspect the Republican leader of seeking to hamper an FBI investigation into the possibility Trump's campaign colluded with what US intelligence says was a Russian effort to sway the 2016 vote.
The president says his decision was motivated strictly by Comey's mishandling of a high-stakes probe into the emails of his presidential rival, Hillary Clinton.
Here are answers to some of the questions raised by Comey's ouster:
Why was Comey fired?
Officials said Trump based his decision to fire Comey on a three-page memo from new Deputy Attorney General Rod Rosenstein, a respected former federal prosecutor who was confirmed in his post on April 25.
Rosenstein's letter lists a string of failings in Comey's handling of the final stages of a drawn-out probe into Clinton's use of a private email server as secretary of state -- which the Democrat says cost her the presidency.
Based on his deputy's assessment, Attorney General Jeff Sessions made the recommendation that Comey be removed from his post, upon which Trump acted immediately.
Rosenstein faulted Comey for publicly announcing, in a bombshell news conference on July 5 last year, that the FBI was closing its probe into the matter without recommending charges -- while describing Clinton's conduct as "extremely careless."
"It is not the function of the director to make such announcements," Rosenstein wrote, noting that public statements on whether to press charges normally fall to federal prosecutors and the Justice Department -- acting on advice from the FBI.
"Compounding the error, the director ignored another longstanding principle: we do not hold press conferences to release derogatory information about the subject of a declined criminal investigation."
Finally, Rosenstein criticized Comey for announcing -- on October 28, 11 days before the presidential election -- that the FBI was reopening its investigation following the discovery of a cache of new emails on the laptop of a Clinton aide's husband.
Comey's revelation triggered a political earthquake -- which Democrats believe tipped the scales against their candidate -- even though the newly-discovered emails turned out to contain nothing of significance.
The FBI director had argued he had a duty to keep Congress informed of the state of play -- and all the more so with an election looming -- despite the Federal Bureau of Investigation's tradition of silence on such matters.
Why fire him now?
Trump's stated reason for firing Comey was greeted with overwhelming skepticism from Democrats as well as some Republicans, and many US political observers.
Back in October, Trump was outspoken in praising Comey's handling of the email probe, and he kept the FBI director in his post upon taking office -- in what critics saw as a tacit reward for his role in damaging Clinton's chances.
But on March 20, Comey informed Congress that the FBI was investigating possible coordination between members of the Trump campaign team and Russia -- a scenario the president dismissed as "fake news."
Comey also flatly rejected Trump's explosive claim that he was wiretapped by his predecessor Barack Obama.
According to Politico, the president -- increasingly exasperated by the attention given to allegations of Russian election meddling -- had been looking to fire Comey for more than a week.
The political website reported that the letters from Rosenstein and Sessions were written to provide a rationale for doing so.
The White House says Rosenstein wrote his letter of his own accord, and that it triggered Trump's decision.
What about the Russia probe?
The FBI's investigation into Russian election meddling -- and possible links with Trump's campaign team -- continues despite Comey's dismissal.
Where it leads -- and whether it gives rise to any criminal charges -- will be determined in large part by who succeeds Comey as director of the FBI.
The Democratic opposition is united behind a key demand: for the Justice Department to appoint a so-called special counsel to oversee the investigation.
Such a figure would enjoy more autonomy than an ordinary federal prosecutor, who answers directly to the Justice Department -- although it would still be possible for the administration to remove him under certain conditions.
In Congress, the intelligence committees of both the Senate and House of Representatives have been pursuing their own high-profile probes into suspected Russian interference for several months. The Senate judiciary committee is also actively probing the allegations.
But several lawmakers -- from both camps -- are calling for the creation of a powerful independent commission of inquiry, with a full-time staff named jointly by Republican and Democrat leaders in Congress.
The Republican leader in the Senate, Mitch McConnell, on Wednesday rejected calls for either a special counsel or a commission of inquiry, which he said would only impede the work of existing probes.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)