Olsen published a relatively miniscule body of work over seven decades, but her story, "Tell Me a Riddle," is considered a classic.
The 1961 story won the O. Henry Award and recounted the final reconciliation of a battling married couple on the brink of the wife's death.
"She's a writer's writer," Feminist Press founder Florence Howe told the Los Angeles Times. "Everyone mourns that there isn't another volume like 'Tell Me a Riddle.'"
Her unfinished novel "Yonnondio: From the Thirties," was published in 1974 and is considered a classic work on the Great Depression.
Olsen died in her longtime home of Oakland after experiencing declining health, the Times said.
Ohio bar shooting arrested, charged with murder
LGBT community has 'bullied the American people': Bachmann