The scandal plunged the military into crisis days before Evo Morales, the president-elect, is to be sworn into office.
Eduardo Rodriguez, the outgoing interim president, said he had accepted the resignation of Gonzalo Mendez, the defence minister, and dismissed General Marcelo Antezana, the army chief, over apparent irregularities in the destruction of a batch of Chinese-made shoulder-launched missiles in the US in October.
"I have relieved the commander of the army of his duties and accepted the defence minister's resignation," he said after a cabinet meeting.
Antezana later appeared on Bolivian television to say the president had made a "bad interpretation" of his role in the missiles' destruction, which led to accusations of treason by Morales.
Morales victory fears
Antezana had earlier told local media that Washington initiated the drive to destroy the missiles because it feared that Morales would be elected president of the South American country. He later retracted his remarks.
At the height of campaigning for last month's elections, Morales - who has described his movement as a "nightmare for the US" - denounced the destruction of the missiles, the only arms of their kind in Bolivia, saying it had left Bolivia with almost no air defence.
Rodriguez said he made the decision to destroy the missiles on the recommendation of the United Nations and the Organisation of American States after receiving information from the army that the missiles were obsolete and presented a safety hazard.
The army chief said the US feared
a Morales (above) presidency
But the president said he had not authorised the missiles' transfer to the US.
Morales's Movement Toward Socialism Party filed a suit against Rodriguez in October, with some members saying the missiles were in working condition.
Party members have distanced themselves from the suit in recent weeks.
The US has been campaigning to rid Latin America of portable arms that could fall into the hands of "terrorists".
A US state department spokesman earlier claimed that Bolivia had requested American help to remove the missiles.
On Tuesday, ABI, the Bolivian state news agency, reported that Rodriguez would make a formal inquiry with the US embassy to investigate America's role in the matter.
Antezana said the missiles could have been deactivated in La Paz, but that "secondary officials at the US embassy in Bolivia had abused the trust" of the Bolivian military in order to carry the missiles to a US base to be destroyed.
Antezana's comments appeared to backtrack from a declaration made in October that he was the sole person responsible for the handling of the missiles.
Rodriguez said the army chief had not conducted himself according to "applicable military norms", referring to a letter Antezana published on Sunday in several Bolivian newspapers demanding that the government release the missile agreement it signed with the US government in 48 hours.
The firing comes as Rodriguez, a caretaker president appointed after the resignation of Carlos Mesa in June, prepares to hand the reins of power to Morales on Sunday.