Activists claimed the Baalshamin Temple was blown up yesterday by militants using explosives.
The blast was so powerful it also damaged some of the columns around it.
Palmyra is a 2,000-year-old Roman city, one of the Middle East’s most significant archaeological areas and a UNESCO World Heritage site.
Turkish-based activist Osama al-Khatib, originally from Palmyra, claimed the temple was destroyed yesterday.
However, the Syrian Observatory for Human Rights based in Britain said the temple, dating from the first century and dedicated to the Phoenician god of storms and fertilising rains, was blown up a month ago.
Both sources agreed a large amount of explosives had been used to raze it to the ground.
It is not yet known if the nearby Temple of Bel was also damaged in the blast.
Head of UNESCO Irina Bokova warned on Friday that Islamic state extremists in Syria and Iraq were involved in “the most brutal, systematic” destruction of ancient sites since World War II.
The Islamic extremists claim ancient relics promote idolatry and claim their destruction is part of a purge of paganism.
But it is believed they are also selling off looted antiquities to fund their campaign.
There was no confirmation last night on social media from Isis supporters the temple had been destroyed.
Syria’s head of antiquities Maamoun Abdul Karim also claimed the temple was destroyed by Isis on Sunday.
He said: “We have said repeatedly the next phase would be one of terrorising people and when they have time they will begin destroying temples.
“I am seeing Palmyra being destroyed in front of my eyes.”
The Baalshamin Temple is just 500 metres from Palmyra’s famous amphitheatre, where militants killed 20 Syrian soldiers after the town was captured in May, according to al-Khatib. Before the city’s capture, Syrian officials said they moved hundreds of ancient statues to safe locations out of concern they would be destroyed.
News of the temple’s destructions comes just days after 81-year-old antiquities scholar Khaled al-Asaad was reported to have been beheaded by Isis.
He had devoted his life to understanding Palmyra and even named his daughter Zenobia, after the queen who ruled the city 1,700 years ago.
Syria’s Directorate-General of Antiquities and Museums had previously said that ISIS had destroyed two ancient Muslim shrines, one in Palmyra and another a few kilometers away.
Other monuments, temples and historic buildings have been mined, and a statue of a lion at the entrance to Palmyra’s museum has been destroyed.
Elsewhere, ISIS has released footage of its fighters smashing artifacts in the museum of the Iraqi city of Mosul and using sledgehammers, power tools and explosives to destroy the ancient Assyrian city of Nimrud.