Houston, 48, had a history of drug problems.She died at the Beverly Hilton hotel where she was staying as a guest.
Houston was one of the most celebrated female singers of all time, with hits including I Will Always Love You and Saving All My Love For You.
But her later career was overshadowed by substance abuse and her turbulent marriage to singer Bobby Brown.
Police spokesman Mark Rosen told reporters Houston was pronounced dead at 15:55 pm (23:55 GMT) in her room on the fourth floor of the Beverly Hilton Hotel.
Fire department personnel and members of hotel security were attempting to resuscitate her when police arrived at the scene, he said, but their efforts were unsuccessful.
“She has been positively identified by friends and family that were with her at the hotel, and next of kin have already been notified,” he added.
The cause of her death remains unclear but Mr Rosen said there were “no obvious signs of criminal intent”.
Houston’s background was steeped in soul and gospel music.
Her mother was gospel singer Cissy Houston, she was cousin to singer Dionne Warwick and goddaughter to Aretha Franklin.
“I just can’t talk about it now,” Ms Franklin said in a short statement. “It’s so stunning and unbelievable. I couldn’t believe what I was reading coming across the TV screen.”
Having grown up in New Jersey, Houston began singing in church and then in the night clubs of New York, and was a model before being signed by Arista Records.
At the height of her career in the 1980s and 90s she won many awards and enjoyed several number one singles and albums. In her career, Houston sold over 170 million albums and singles worldwide, with many hit singles. Her lead single, “I Will Always Love You,” became the best-selling album by a female artist in music history.
Artists from Mariah Carey to Christina Aguilera have tried to emulate her bravura performances, but none of them were as good as the original, music critic Paul Gambaccini told the BBC.
Houston also enjoyed success acting in blockbuster films such as The Bodyguard and Waiting to Exhale.
In recent years drug use took its toll on the star and her voice – once acknowledged as one of the finest in pop music – was badly damaged.
“She did have it all, but the record is there of the decline into drug use and the damage done from drug use,” said Gambaccini.
Her marriage to Brown, with whom she had a daughter, Bobbi Kristina, ended in divorce in 2007. The marriage had been a tempestuous one, with allegations of domestic abuse.
“The biggest devil is me. I’m either my best friend or my worst enemy,” Houston told ABC’s Diane Sawyer in a 2002 interview.
Correspondents say Houston’s death will undoubtedly overshadow the music industry’s Grammy Awards, due to be held in Los Angeles on Sunday.
She had been expected to attend the ceremony and her close friend and long-time mentor Clive Davis had recently hinted she might perform.
“It’s her favourite night of the year … who knows by the end of the evening,” he had told AP.