Why did President Truman fire General MacArthur?

President Truman fired General MacArthur because he made public statements that flatly contradicted the Administration's policies. At the time of his dismissal, MacArthur was Commander-in-Chief of the Far East and remained in Japan, even though the post-war American occupation of the country was winding-down. At this time, large cuts to the US military budget resulted in a significant reduction in the number of troops MacArthur had to work with. Always a volatile, egotistical personality, MacArthur never hesitated to make his true feelings known to politicians, as far as military affairs were concerned.
However, relations between Truman and MacArthur really came to a head during the Korean War. In the early stages of the conflict, MacArthur's skill as a military strategist came to the fore, saving South Korea from falling to the Communist forces of the North. Having achieved such success, MacArthur wanted to go further, turning defense into attack by pushing on into North Korea to defeat the Communists once and for all. Truman went along with MacArthur's bold initiative but was still worried that a full-scale assault on the North might provoke Communist China into direct involvement with the conflict. MacArthur assured Truman that the chances of this happening were slim. Yet, in late 1950, that's precisely what did happen, and Truman was furious at what he saw as MacArthur's strategic blunder.
In the wake of the Chinese invasion, relations between the two men deteriorated sharply, degenerating into an unseemly public slanging match. Inevitably, the civilian power prevailed over the military; Truman was, after all, Commander-in-Chief. But public opinion was overwhelmingly supportive of MacArthur. Most Americans believed that it was necessary for the United States to take the initiative in defeating Communism, instead of simply trying to contain its spread, as Truman appeared to believe.