We've all heard stories about Truman firing MacArthur. What really happened? Well, it turns out to be much more pragmatic than the stories....so here's the boring truth!
From an article by Bruce Cumings on the Korean War:
The US came closest to using atomic weapons in April 1951, when Truman removed MacArthur. Although much related to this episode is still classified, it is now clear that Truman did not remove MacArthur simply because of his repeated insubordination, but because he wanted a reliable commander on the scene should Washington decide to use nuclear weapons; Truman traded MacArthur for his atomic policies.
From the Truman Library:
In 1951, President Truman and his advisors were preparing to engage North Korea and China in peace negotiations, in an attempt to resolve the ongoing conflict. General Douglas MacArthur, the commander of the U.N. forces in Korea, issued an unauthorized statement containing a veiled threat to expand the war into China if the Communist side refused to come to terms. When MacArthur continued to support an expansion of the war, communicating directly with a like-minded Republican congressman, Truman, with the backing of the Joint Chiefs of Staff, as well as the Secretaries of State and Defense, felt they had no alternative but to replace MacArthur with a military commander who would act in concert with the administration’s foreign policy.
From PBS, you can visit the primary documents on this topics as well.