The British-born actor, best known for his role as the father in Frasier, died in a hospice care in Chicago, his manager announced.
He was on the show for 11 seasons spanning from 1993 through to 2004 and his character, Martin Crane, is a fan favourite.
Mahoney, a well respected actor, won a Tony Award in 1986 for best featured actor in a play for his work in "The House of Blue Leaves".
He also won a Screen Actors Guild (SAG) Award in 2000 for his performance in Frasier and was nominated for two Emmys and two Golden Globes.
Beyond television and theatre Mahoney had a lucrative film career, appearing in 30 movies, including The American President, Eight Men Out and Say Anything.
His more recent roles include a guest appearance on Hot in Cleveland and also portraying Andrew Del Mar in an episode of ITV drama Foyle's War in 2015.
Mahoney was born in Blackpool but moved to the US as an adult.
He served in the US army for three years before becoming a US citizen.