He was 85.
The Nobel judges singled out as his "masterpiece" the 1987 work "The Enigma of Arrival."
His first book was a novel, "The Mystic Masseur" in 1957. Other titles include "Miguel Street;" "A House for Mr. Biswas," with a protagonist based on Naipaul's father; "The Loss of El Dorado," a colonial history of Trinidad; and "Beyond Belief: Islamic Excursions among the Converted Peoples," on the eastern regions of the Islamic world.
Vidiadhar Surajprasad Naipaul was born in 1932, near Port of Spain, Trinidad and Tobago, descended from Hindu immigrants from India. He went to England at 18 to study at Oxford University.
"He is to a very high degree a cosmopolitan writer, a fact that he himself considers to stem from his lack of roots: he is unhappy about the cultural and spiritual poverty of Trinidad, he feels alienated from India, and in England he is incapable of relating to and identifying with the traditional values of what was once a colonial power," the Nobel judges said.
Naipaul is recognized in India for his writings on Hindu civilization.
"Sad to learn of the passing of V.S. Naipaul whose books are an penetrative exploration of faith, colonialism and the human condition, in his home in the Caribbean and beyond. A loss for the world of letters and for the broader school of Indo-Anglian literature," tweeted Ram Nath Kovind, the President of India.
Naipaul also won the Booker Prize in 1971, among other literary honors. He was knighted by Queen Elizabeth in 1990.
"When I learnt to write I became my own master, I became very strong, and that strength is with me to this very day," he told Reuters in 2010.
CORRECTION: This story has been revised to correctly identify the President of India, Ram Nath Kovind.