For years, Montazeri had accused the country's ruling Islamic establishment of imposing dictatorship in the name of Islam, and he persisted with his criticism after June's disputed presidential election.
His stance made him a hero to the opposition, and his criticisms were even more stinging because of his status. In a reflection of that veneration, crowds of people from the capital and other cities immediately set off to the holy city of Qom to participate in his funeral Monday, according to the pro-reform Web site Rah-e Sabz. The police presence there was also increased, the report said.
Authorities faced a difficult choice over whether to try to prevent an outpouring at the funeral that could escalate into another street protest by the government's opposition. Doing so risks serious backlash from an influential group of clerics based in Qom who are among the current leadership's critics.
Hoping to limit attention on the funeral, authorities banned foreign media coverage of it and barred reporters from traveling to Qom.
Montazeri's grandson, Nasser Montazeri, said he died in his sleep overnight. The Web site of Iranian state television quoted doctors as saying Montazeri had suffered from asthma and arteriosclerosis, a disease that thickens and hardens arteries.
Montazeri had once been designated to succeed Ayatollah Ruhollah Khomeini, the late founder of Iran's 1979 Islamic Revolution, as the supreme leader - but the two had a falling out a few months before Khomeini died of cancer in 1989.
Montazeri was one of the leaders of the revolution and he helped draft the nation's new constitution, which was based on a concept called velayat-e faqih, or rule by Islamic jurists. That concept enshrined a political role for Islamic clerics in the new system.
But a deep ideological rift soon developed with Khomeini. Montazeri envisioned the Islamic experts as advisers to the government - but without outright control to rule themselves. Taking the opposing view, Khomeini and his circle of clerics consolidated absolute power.
Montazeri was increasingly cast by authorities as an outsider and misguided theologian.
During the late 1980s, Montazeri was gradually stripped of his official duties and became the focus of a high-level campaign to undermine his credentials as a leader and theologian.
It was not Montazeri, but Ayatollah Ali Khamenei who succeeded Khomeini in 1989.
In 1997, Montazeri was placed under house arrest in Qom, 80 miles (130 kilometers) south of Tehran, after saying Khamenei wasn't qualified to rule - a call echoed years later by the opposition protesters who took to the streets after June's disputed presidential vote.
The penalty was lifted in 2003, but Montazeri remained defiant, saying the freedom that was supposed to follow the 1979 revolution never happened.
Montazeri was one of just a few grand ayatollahs - the most senior theologians of the Shiite Muslim faith.
After he was placed under house arrest, state-run media stopped referring to Montazeri by his religious title, describing him instead as a "simple-minded" cleric. Any talk about Montazeri was strongly discouraged, references to him in schoolbooks were removed and streets named after him were renamed.
The official IRNA news agency issued a two-line report on Montazeri's death without mentioning his title and state radio and television broadcasters were equally terse, reflecting the deep tension between the government and its opponents.
Past deaths of high-ranking religious figures were accompanied by wide coverage in state media, along with the broadcast of condolence messages by Iranian leaders to their families and followers.
After the disputed election, pro-government figures tried to reduce Montazeri's impact by spreading reports that he had become senile and that his supporters were issuing opinions in his name.
Several top pro-opposition ayatollahs gathered at Montazeri's house after his death, the Gooya News Web site reported.
Montazeri is expected to be buried inside the shrine of Masoumeh, a female saint revered by Shiite Muslims, according to news reports. The shrine is in the center of Qom.
Montazeri was still respected by many Iranians, who observed his religious rulings or supported his calls for democratic change within the ruling establishment.