Sheikh Obeikan, who was an adviser to the royal cabinet, opposed moves to relax gender segregation.
The dismissal comes shortly after Sheikh Obeikan attacked plans by "influential people to corrupt Muslim society by trying to change the natural status of women".
Saudi officials did not give a reason for Sheikh Obeikan's departure.
His recent comments were taken to be an attack on tentative steps towards relaxing some stricter interpretations of Saudi law.
King Abdullah has promised women the right to vote in future elections, has opened the country's first co-educational university and introduced measures against domestic violence.
The head of Saudi Arabia's religious police, the "mutawa", was also replaced in January, with the new head widely seen as more moderate than his predecessor.
Sheikh Obeikan achieved a degree of notoriety several years ago with a decree suggesting that unrelated Saudi men and women could mix so long as the man drank the woman's breast milk, thus creating a maternal bond between them.
Saudi King Abdullah has sacked one of his most hardline advisers, Sheikh Abdelmohsen al-Obeikan.