Ali Nawaz Chowhan was dismissed without an official announcement, a source in the west African nation's judiciary told AFP late Tuesday, adding: "We have no idea why he was removed from his position."
Chowhan, who was a judge for three years in the International Criminal Tribunal for the Former Yugoslavia in The Hague, had served just 14 months under Jammeh after he was sworn in on March 6 last year.
Court of Appeal president Emmanuel Fagbenle becomes "acting chief justice" - a role which he performed for several weeks the last time a chief justice was axed in February last year - the source said on condition of anonymity.
Fagbenle has been cited by local media as presiding over many high-profile cases in recent years and was sworn in as a Court of Appeal justice six years ago, according to a government release from 2009.
A lawyer in Gambia's capital Banjul described the move as "unconstitutional", adding that Jammeh had no power to sack the chief justice.
"The constitution states that the president shall in consultation with the Gambia Judicial Service Commission appoint the most senior Supreme Court judge as chief justice," he said.
"Where does Jammeh derive his authority from? Fagbenle is not one of the Supreme Court judges."
Recent chief justices have not lasted long under Jammeh, a notoriously fickle leader who regularly reshuffles his government and judiciary.
In what many observers say is a sign of insecurity, the president also runs several key ministries himself, including defence and religious affairs.
Fagbenle briefly took over last year when Ghanaian-born chief justice Mabel Yamoa Agyemang, the first woman in the role, was sacked without explanation.
Agyemang had herself replaced another Nigerian, Joseph Wowo, who became mired in a bribery scandal in July 2012 and was jailed on a string of corruption charges.
Jammeh, who has ruled mainland Africa's smallest country with an aura of mysticism and an iron fist since seizing power in 1994, vowed ahead of his swearing-in for a fourth term in 2012 to eradicate corruption.
In the same year, former information minister Amadou Scattred Janneh was sentenced to life in prison for treason for distributing T-shirts which featured the slogan "End to Dictatorship Now".
A sliver of land nestled within Senegal, Gambia has over the years also seen the arrest and jailing of a number of senior military and police officers for crimes relating to treason, drug trafficking and corruption.
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