The cause of death was complications from severe pneumonia, the Gibson Guitar Corp. said in a statement posted on its Web site.
Born Lester William Polfuss on June 9, 1915, in Waukesha, Wis., Paul's career as a soloist and group artist spanned from the 1930s to the present, his biography said. He began playing honky-tonk at age 13, and shifted to other genres before settling into jazz and blues.
He and his second wife, Mary Ford, amassed three dozen hits, including "How High the Moon," and "Vaya Con Dios."
He pushed the envelop in guitar design, designing the ground-breaking template for Gibson Guitar's best-selling electric guitar, the Les Paul model, and forging a relationship with the music company that lasted more than 50 years.
"The world has lost a truly innovative and exceptional human being today. I cannot imagine life without Les Paul," said Henry Juszkiewicz, chairman and chief executive officer of Gibson Guitar.
His recording innovations included overdubbing, delay effects such as "sound on sound" and tape delay, phasing effects, and multi-track recording.
Despite a number of medical maladies, including a heart attack, hearing loss and arthritis, Paul performed two weekly shows in New York with the Les Paul Trio until recently.
In 2005, he won two Grammys for "Les Paul & Friends: American Made World Played," featuring collaborations with electric guitar royalty such as Keith Richards, Jeff Beck, Eric Clapton and Joe Perry.
Paul is the only individual who has been inducted into the Grammy Hall of Fame, the Rock and Roll Hall of Fame, the National Inventors Hall of Fame and the National Broadcasters Hall of Fame, Gibson said.
Paul is survived by his three sons, a daughter, five grandchildren and five great grandchildren.