Hakimullah Mehsud demoted Maulvi Faqir Mohammad, who was the second-highest ranking Taliban leader, at a Taliban council of leaders on Sunday.
No reason was given but correspondents say the move is the latest sign of a rift within the group.
Maulvi Faqir Mohammad has not yet been replaced by another militant commander.
A Taliban spokesman told BBC Urdu that he had been removed with immediate effect but that the Taliban leadership was considering appointing him to some other position within the group.
The BBC’s M Ilyas Khan in Islamabad says the decision is the latest sign of a growing rift within the Pakistani Taliban – known as Tehrik-e-Taliban Pakistan (TTP) – that began when its former leader, Baitullah Mehsud, was killed in August 2009.
At that time, Maulvi Faqir Mohammad was one of the contenders for the top post, but had to settle for the position of deputy head because the TTP wanted to keep its leadership within the Waziristan tribal area, their major stronghold.
Since then, he has had an uneasy relationship with the central command of the TTP, our correspondent says.
And last year some elements of the TTP accused him of having contacts with the Pakistani government, which he denied. He has previously admitted to the BBC that he had “minor” differences with Taliban leadership.
Maulvi Faqir Mohammad led the Taliban in the Bajaur district, in the extreme north of the tribal areas and at some distance from Waziristan.
The volatile Bajaur region is believed to have been home to al-Qaeda leaders such as Ayman al-Zawahiri, and militants loyal to the non-Taliban commander Gulbuddin Hekmatyar, our correspondent adds.
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