Madoff died early on Wednesday at the Federal Medical Centre in Butner, North Carolina, apparently from natural causes, a person familiar with the matter told the Associated Press.
Last year, Madoff's lawyers filed court papers to try to get the 82-year-old released from prison in the Covid-19 pandemic, saying he had suffered from end-stage renal disease and other chronic medical conditions.
The request was denied.
Madoff admitted swindling thousands of clients out of billions of dollars in investments over decades.
A court-appointed trustee has recovered more than 13 billion dollars (£9.4 billion) of an estimated 17.5 billion dollars (£12.7 billion) that investors put into Madoff's business.
At the time of his arrest, fake account statements were telling clients they had holdings worth 60 billion dollars (£43.5 billion).
For decades, Madoff enjoyed an image as a self-made financial guru whose Midas touch defied market fluctuations.
A former chairman of the Nasdaq stock market, he attracted a devoted legion of investment clients - from Florida retirees to celebrities such as famed film director Steven Spielberg, actor Kevin Bacon and Hall of Fame baseball pitcher Sandy Koufax.
But his investment advisory business was exposed in 2008 as a multibillion-dollar Ponzi scheme that wiped out people's fortunes and ruined charities and foundations.
He became so hated he had to wear a bulletproof vest to court.
Madoff pleaded guilty in March 2009 to securities fraud and other charges, saying he was "deeply sorry and ashamed".
After several months living under house arrest at his seven million dollar Manhattan penthouse apartment, he was led off to jail in handcuffs to scattered applause from angry investors in the courtroom.
"He stole from the rich. He stole from the poor. He stole from the inbetween. He had no values," former investor Tom Fitzmaurice told the judge at the sentencing.
US District Judge Denny Chin showed no mercy, sentencing Madoff to the maximum 150 years in prison.
Both of Madoff's sons have died, Andrew from cancer at the age of 48 and Mark from suicide aged 46 in 2010.
Madoff's wife, Ruth, is still living.