At a crisis meeting in Birmingham, activists voted by 867 to 500 to express their lack of faith in his ability to lead the party.
The move now leaves the party facing a further period of uncertainty, with Mr Bolton forced out after only being elected in September last year.
Mr Bolton had attempted to cling on to the leadership despite a no confidence vote by the ruling national executive committee (NEC) and a revolt by several senior figures in the party in protest at his relationship with model Jo Marney.
Mr Bolton said he still has “strong affections” for his former girlfriend who sent offensive messages about Meghan Markle, and compared the scrutiny of his private life to that faced by Diana, Princess of Wales.
Ukip will face a fresh leadership election within 90 days after Mr Bolton lost the no confidence motion.
Outgoing chairman Paul Oakden said: “Henry Bolton has been removed by the democratic decision of the membership”.
Mr Oakden said that he viewed the meeting as a success - because unlike the last one, no one had died. At the EGM in 2000 “a member of the party died of a serious cardiac arrest”.
Gerard Batten will take over as Ukip’s interim leader, the party announced.
Speculation is mounting that Mr Bolton’s exit could pave the way for the return of former leader Nigel Farage.
Senior Ukip figure Suzanne Evans told the Press Association ahead of the vote that it was “crunch time” for the party and Mr Farage should again take the helm.
The pro-Brexit party has lurched from crisis to crisis since Mr Farage relinquished power following the 2016 referendum, with a succession of leading party figures failing to keep a grip on the leadership.
Mr Bolton earlier said he thought “it’s going to be very difficult for the party to survive” another round of leadership turmoil.
He had also suggested he would not rule out running for the top job again in future.
The cash-strapped party faces a separate series of challenges, including the prospect of a hefty legal bill over a defamation action brought by Rotherham’s three Labour MPs against MEP Jane Collins.
Mr Bolton’s former girlfriend Jo Marney responded on social media to his ousting, writing that her love for him was not dependent on him being party leader.
The model tweeted: “Pffft. Bunch of muppets. My love for Henry is unconditional of political leaderships. I ain’t going anywhere.”
Before the vote, she had tweeted: “Very best of luck to @_HenryBolton today. Will I be there? No, I shan’t be. This is a decision for the members, and I am not a member. It’s time for UKIP to focus on politics and Brexit and not private lives. HB is the man to reform UKIP and deliver us through Brexit & beyond.”
The party’s ruling national executive committee had backed a motion of no confidence in Mr Bolton last month after it was revealed 25-year-old model Ms Marney had made highly offensive comments about Prince Harry’s fiancee and black people.
Mr Bolton refused to rule out the possibility that he could join another party after being driven from the leadership.
He told Sky News: “You can’t keep a good man down, I’m not finished in politics, so just one of those bumps in the road.
“I’ve just spoken to my team, we’ve had a quick batting around of the different options and we’ll continue doing that over the next few days.”
Asked whether he could stand for Ukip leader again or for another party, he said: “I’m not ruling out any option at the moment - the only time that I will rule options is during the process of making decisions.”
Mr Bolton also denied reports that he threatened to sue the party during the leadership contest, saying: “There have been issues that I believe and my legal advice believes has been instrumental in creating a situation which has brought about this vote of no confidence and this EGM.
“The NEC have the proof of that but have decided not to take any action about it until after the EGM.”