The writer, who penned more than 30 books over his lifetime, died peacefully at his London home, his family said.
Announcing his death on Saturday night, his wife Lady Nadira Naipaul said he had lived a life “full of wonderful creativity and endeavour”.
Naipaul was famously outspoken throughout his career, and notoriously fell out with author Paul Theroux, whom he had mentored.
But the pair later reunited, and Theroux spoke fondly of Naipaul as he paid tribute to “one of the greatest writers of our time”.
He told the Associated Press: “He never wrote falsely. He was a scourge of anyone who used a cliche or an un-thought out sentence. He was very scrupulous about his writing, very severe, too.”
Naipaul, whose books often dealt with colonialism and attacked religion, politicians and pillars of the literary establishment, also had a tense relationship with author Salman Rushdie, once describing the Ayatollah Khomeini’s 1989 fatwa on Rushdie as “an extreme form of literary criticism”.
In a Twitter post, Rushdie conceded that the pair had “disagreed all our lives, about politics, about literature”, but added: “I feel as sad as if I just lost a beloved older brother. RIP Vidia.”
In a statement on Saturday night, Lady Naipaul said her husband was “a giant in all that he achieved”, adding: “He died peacefully surrounded by those he loved having lived a life which was full of wonderful creativity and endeavour.”
The author was awarded the Nobel Prize for Literature in 2001 for “having united perceptive narrative and incorruptible scrutiny in works that compel us to see the presence of suppressed histories”.
The Academy singled out his 1987 work The Enigma of Arrival, saying he created an “unrelenting image of the placid collapse of the old colonial ruling culture and the demise of European neighbourhoods”.
Naipaul was knighted in 1990, and won numerous other major writing prizes throughout his life, including the Booker in 1971 and the David Cohen British literature prize in 1993.
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His 1961 novel, A House for Mr Biswas, is regarded by many critics as one of his most influential works.
The book was based on the life of his father Seepersad, who was a reporter for the Trinidad Guardian.
Naipaul’s books on Islamic fundamentalism - the 1981 work Among the Believers and the 1998 book Beyond Belief - were written after he travelled through non-Arab “converted” Islamic countries.
His attacks on the religion prompted leading English professor Edward Said to say: “It is hard to believe any rational person would attack an entire culture on that scale.”
In the 1990s, Naipaul concentrated on non-fiction, and it was in 1994 that his long awaited novel appeared, A Way in the World, an autobiography and a fictional history of colonialism, presenting stories from the times of Sir Walter Raleigh to the 19th century revolutionary Francisco Miranda.
There developed a decades-long friendship between Naipaul and Theroux, but in an angry and unforgiving book, Sir Vidia’s Shadow, Naipaul rejected Theroux.
The feud lasted until the pair finally buried the hatchet in 2011, when writer Ian McEwan persuaded them to shake hands at the Hay literature festival.
Theroux told the Associated Press that there had been a “great satisfaction in reconnecting”, adding: “It took him a long time to make his mark, but when he did, it happened in a big way.”
Naipaul - whose full name was Vidiadhar Surajprasad Naipaul - was born in Chaguanas, Trinidad, and his family moved to the country’s capital, Port of Spain, when he was six.
It would later become the setting for his first novel, written in 1959 and titled Miguel Street.
In 1948 he won a government scholarship to read English at Oxford’s University College, where he suffered a nervous breakdown.
He married Patricia Hale, whom he met at Oxford in 1955.
She died in 1996 and he went on to marry Lady Nadira, who was some 20 years his junior, shortly afterwards.
Last month, Naipaul’s 1971 work In a Free State was shortlisted for the one-off Golden Man Booker, which marked the 50th anniversary of the Booker Prize.