Guzman was captured in 1992 in Peru’s capital, Lima, and jailed for the rest of his life after being convicted as a "terrorist".
Susana Silva, head of Peru’s prison system, told RPP radio on Saturday that Guzman had been ill in recent months and had been released from a hospital in early August.
She said his health condition worsened in the past two days, without elaborating further, adding Guzman was set to receive more medical attention on Saturday but died in his cell at about 6:40am local time (11:40 GMT).
A former philosophy professor, Guzman was a lifelong communist who travelled to China in the late 1960s and was awed by Mao Zedong’s Cultural Revolution. He resolved to bring Mao’s brand of communism to Peru through a class war that he launched in 1980.
Guzman founded the Shining Path, transforming it from a ragtag band of peasants and radical students into a potent rebel group. An estimated 69,000 people, mostly in Peru’s poor interior, were killed between 1980 and 2000 in the internal conflict launched by the Shining Path.