The death of Virgil Runnels, which was his real name, was announced by World Wrestling Entertainment (WWE).
His long and glittering career, which began in the late 1960s, earned him a place in the WWE Hall of Fame.
"Runnels became a hero to fans around the world thanks to his work ethic, his impassioned interviews and his indomitable spirit," said WWE.
The statement went on to describe him as a "creative visionary who helped shape the landscape of WWE" long after his retirement from the ring.
Tributes poured in for the Texan-born fighter, who won several world titles and became famous during the height of wrestling's popularity in the 1970s and 1980s.
"Saddened to hear the passing of Dusty Rhodes. Legend, teacher, mentor, friend ... Love you Dream," said professional wrestler Paul Levesque, also known as Triple H.
"My mentor," tweeted Ric Flair. "Much love to your family and more respect than can ever be measured. Love you Dream."
A WWE spokesman declined to give a cause of death or any details on where he died.

NHS Highland asked people to avoid the site last week, after 50 people fell ill with the sickness bug.
Consultant microbiologist Dr Chin Lim said three wards remained closed to new admissions and visitors but the rest of the hospital was open.
Tests have confirmed the presence of the bug in wards 7C, 2C and 2A.
In a statement, Dr Lim thanked people for their "patience and understanding".
He added: "While I am pleased that we have been able to reopen to visiting we know norovirus is still in the community so would ask that visitors are limited to two per patient and that if you, or anyone you live with, has had symptoms of diarrhoea and vomiting you refrain from coming into the hospital until you are clear for 72 hours."
One of wrestling's most colourful stars, Dusty Rhodes, the self-styled "American Dream", has died aged 69.
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Restrictions on visitors have been lifted at Raigmore Hospital in Inverness following an outbreak of norovirus.