Grady first gained fame as a Mouseketeer, but he was best known for his 12 years on the popular TV sitcom, "My Three Sons." Grady played older brother Robbie Douglas from 1960 to 1972.
Grady reportedly had been receiving hospice care at his home in Thousand Oaks, but the exact cause and place of death were not immediately clear.
Grady was a child musician who never stopped loving music. He even became a composer.
"From Mouseketeer to actor to musician to composer, he was quite an inspiration to me," co-star Barry Livington, who played youngest brother Ernie on "My Three Sons," told ABC7's George Pennacchio.
"My Three Sons," which featured Fred MacMurray as a widowed aeronautical engineer struggling to raise three older boys, was among the longest running family sitcoms of all time with 380 episodes.
In the show's earlier years Douglas was actually the middle brother, with Tim Considine playing the oldest, Mike, and Stanley Livingston playing the youngest, Chip. When Considine departed, Barry Livingston became the adopted "third" son, and Grady became the cool, handsome and assured eldest brother that much of America adored.
"He was the older brother I never had and he got to live his dream his entire life," said Stanley Livingston.
Grady, a San Diego native, made a handful of guest appearances on TV series in the 1970s and 1980s, but worked primarily as a musician and composer, writing the theme for "The Phil Donahue Show.
Grady is survived by his wife, Ginny, and two children. He was 68.
The Associated Press contributed to this report.