Laviolette led the Carolina Hurricanes to their only Stanley Cup title in 2006. He was fired in December 2008 and was still under contract.
Laviolette, who also coached the New York Islanders for two seasons, was 167-130-30 in his four-plus seasons with Carolina. Flyers general manager Paul Holmgren made the call to fire Stevens.
"I think Paul felt he had to make this change," Flyers chairman Ed Snider said. "I make it a policy never to overrule my general manager, because once I do, it means I've lost confidence in him."
The Flyers were expected to contend in the Eastern Conference this season. They were 13-11-1 for 27 points and out of the playoff picture entering Saturday's game against Washington. Holmgren said a new voice was needed.
"Peter Laviolette brings experience along with a different approach to the game," he said.
Stevens got the job early in the 2006 season after Ken Hitchcock was fired and led the Flyers to the Eastern Conference finals the following season.
The Flyers haven't scored in their last two games, and captain Mike Richards called a team meeting after their 3-0 loss to Vancouver on Thursday.
Stevens took over in 2006 with the Flyers off to a 1-6-1 start en route to the worst season in franchise history. Stevens, who led Philadelphia's AHL affiliate to the Calder Cup in 2005, used many of those same players to cap one of the greatest turnarounds in NHL history and take the Flyers to the conference finals the next year. The Penguins knocked them out in 2008, and eliminated the Flyers again in the first round last season.
The additions of goalie Ray Emery and defenseman Chris Pronger made the Flyers a playoff favorite heading into this season, but injuries and a loaded offense that quickly went dry sent them into a tailspin.
Philadelphia has one win in its last seven games and has scored two goals or fewer in the last four.
"If I had the answer, we wouldn't be sitting here talking about this right now," Pronger said Thursday.
Stevens went 120-109-34. He had two 10-game losing streaks with the Flyers.
A former draft pick of the Flyers in 1984, Stevens had a 15-year pro career as defenseman, including 53 NHL games with Philadelphia and the Hartford Whalers.