Officials say 58-year-old Eduardo Robles-Holguin was hospitalized and put on a ventilator after testing positive about a week and a half ago. He died Monday.
More than 600 inmates and 14 staff members at the prison have contracted the virus.
Families of some inmates protested living conditions at the prison last week.
RELATED: Terminal Island prison sees 4 inmate deaths from COVID-19, over 600 cases
The infection rate among inmates at Terminal Island is the highest in the nation for federal prisons. Terminal Island is a low-security facility that houses 1,053 male offenders and specializes in housing inmates who need long-term medical or mental-health care.
The prison has set up temporary field quarters with the help of the U.S. Coast Guard to separate those who are healthy from those who are infected.
Meanwhile, another Southern California prison - the California Institution for Men in Chino - is battling a coronavirus outbreak.
So far, 211 inmates at the prison have tested positive, along with one inmate death. Forty-four prison employees have also tested positive.
RELATED: 'None of us want to die in here': Chino prison inmates speak about COVID-19 fears