Fast food giant McDonald's has severed all ties with the farm which provides meat for its McNuggets after an undercover investigation appeared to expose workers stabbing, clubbing and stamping on chickens.
The firm branded the behaviour shown in the footage "unacceptable".
The video was shot by an animal rights campaigner from Mercy for Animals, who said they had discovered gruesome levels of cruelty towards the birds at T&S Farm in Dukedom, Tennessee, over the course of three weeks.
Those caught on camera can be seen stepping on birds' necks and pulling their bodies upwards, cramming them into tiny cages and battering them with clubs.
The farm was under contract to Tyson Foods, which supplies chicken meat to McDonald's - but both firms have now terminated their contract.
Tyson Foods' Christine Daugherty, who runs the sustainable food production department, said an investigation had been launched."Based upon what we know, we are terminating the contract with the grower," she added.
In a statement, McDonald's said it supported the decision and was working with Tyson on the investigation.
An investigator for the Weakley County Sheriff's Office said it too had opened an investigation into the farm.
T&S Farm could not be immediately contacted for comment, Reuters reported.