Steve Klein, a spokesman for the King Centre in Atlanta, America, said King died late on Tuesday in Santa Monica, California, aged 51. Klein added that the family did not know the cause of death but that relatives think it might have been a heart problem.
The actor, speaker and producer was the founder and head of Higher Ground Productions, billed as a "gateway for inner peace, unity and global transformation." On her company's Web site, King described her mission as encouraging personal growth and positive social change.
King was also an author and advocate for peace and non-violence, and held memberships in the Southern Christian Leadership Conference which her father co-founded in 1957 and the National Association for the Advancement of Coloured People. Her death comes more than a year after the death of her mother, Coretta Scott King.
She appeared in numerous films and played Rosa Parks in the 1978 miniseries "King." She also appeared in "Ghosts of Mississippi," and founded a production company called Higher Ground Productions.
Born in 1955 in Montgomery, Alabama., King was just an infant when her home was bombed during the turbulent civil rights era.
She was the most visible and outspoken among the Kings' four children during activities honouring this year's Martin Luther King Day in January, the first since Coretta Scott King's death.
At her father's former Atlanta church, Ebenezer Baptist, she performed a series of one-actor skits on King Day this year that told stories including a girl's first ride on a desegregated bus and a college student's recollection of the 1963 desegregation of Birmingham, Alabama.
She also urged the audience at Ebenezer to be a force for peace and love, and to use the King holiday each year to ask tough questions about their own beliefs on prejudice.
"We must keep reaching across the table and, in the tradition of Martin Luther King Jr. and Coretta Scott King, feed each other," King said.
When asked then about how she was dealing with the loss of her mother, King responded: "I connected with her spirit so strongly. I am in direct contact with her spirit, and that has given me so much peace and so much strength."
A flag at The King Centre, which King's mother founded in 1968 and where she was a board member, was lowered to half-staff on Wednesday.
Yolanda King is survived by her sister, the Rev. Bernice A. King; two brothers, Martin Luther King III and Dexter Scott King; and an extended family.
Funeral arrangements were to be announced later, the family said in a statement.