If laughter really is the best medicine, then Diller helped dispense it for decades. The family said she died peacefully in her sleep in Los Angeles.
"I adored her. She was a wondrous spirit who was great to me," said Barbra Streisand in a statement.
She began her comedy career as a mother of five when she was in her late 30s. Her first husband, Sherwood Diller, was the one who prodded her for two years to get into comedy and give up a successful career as an advertising and radio writer. She first took the stage at San Francisco's famed Purple Onion. Her first TV appearance was opposite "Groucho" Marx on the game show, "You Bet Your Life."
Her husband managed her career until the couple's 25-year marriage fell apart in the 1960s.
Diller was a staple of nightclubs and television from the 1950s when female comics were rare until her retirement in 2002. She built her stand-up act around the persona of the corner-cutting housewife with bizarre looks, a wardrobe to match and a husband named "Fang." She married twice, but "Fang," often the butt of her jokes, was a work of fiction.
"You can have, say, a pulse of 60 at the beginning of a show. When you come off, your pulse can be 120 and you are bursting with endorphins - high as a kite," she once said.
When Diller's comedy career took out, it soared. She appeared in movies, including "Boy, Did I Get a Wrong Number" and "Eight on the Lam" with Bob Hope. In 1966-67, she was the star of an ABC sitcom about a society family trying to stave off bankruptcy, "The Pruitts of Southampton," and in 1968, she was host of a short-lived variety series, "The Beautiful Phyllis Diller Show."
In later years, she made appearances on sitcoms like "The Bold and the Beautiful," and she was the queen in the animated film, "A Bug's Life."
Her face would change over the years - Diller was one the first celebrities to be upfront about having plastic surgery.
In 2002, when she decided to hang-up her wig and retire from stand-up, she summed it all up saying, "I feel I've done a good job. I've done my best, and I've had such fun."
The Associated Press contributed to this story.