Shields died Wednesday night in Victoria, British Columbia, of complications from breast cancer that was first diagnosed almost five years ago, her publisher, Random House, said in a statement.
In the release, Shields' eldest daughter, Anne Giardini, said: "This is a difficult time for us. It is going to take all of our courage, resolve and grace to even try to go on without her. My parents had 46 years of marriage, but there were many happy, busy years ahead of them. She had many books left to write. We are bereft."
Born in Oak Park, Illinois, Shields was a naturalized Canadian with dual citizenship, referring to herself as having "a foot on either side of the border."
Diagnosed with breast cancer in 1998, she had spoken openly about her illness. She continued writing despite her illness, and was a finalist for Britain's most prestigious literary award, the Booker Prize, last year for "Unless."
Shields was so beloved among fellow writers that they didn't wait for her to die to pay tribute. At an April 2002 event in Toronto that Shields was too ill to attend, Michael Ondaatje, Margaret Atwood and others read from her work and praised her as a person.
"It was very moving," Shields later said in a phone interview with The Associated Press. "It's unusual to hear writers say such wonderful things about each other."
Author of more than a dozen books, she was best known for "The Stone Diaries," winner in 1995 of the Pulitzer Prize, the National Book Critics Circle award and Canada's Governor General's Literary Award. More than 700,000 copies are in print.
"The Stone Diaries" follows the life of Daisy Goodwill Flett, "a middle-class woman, a woman of moderate intelligence and medium-sized ego and average good luck."
From her birth on a kitchen floor in Canada to her retirement in Florida, Daisy lives through much of the 20th century, enduring childhood tragedy and a tragic first marriage, raising three children and emerging late in life as a popular garden columnist.
"I've been witness to this huge change for women in the second half of the 20th century," Shields said. "They say you write the same novel over and over and the idea of women being fully human has always been a preoccupation."
Shields was born Carol Warner in 1935, the youngest of three children. Her mother was a schoolteacher, her father managed a candy factory. Carol majored in English at Hanover College, and soon after married Donald Shields, a civil engineer. They moved to Canada and eventually had five children.
Like millions of housewives, she was influenced by "The Feminine Mystique," Betty Friedan's famous call for women to broaden their lives. Artistic from an early age, Shields in 1965 submitted a poem that won first prize in a young writers' competition.
"I was always the girl at school who always did the class play and the class poem," she said. "I've always loved language."
Shields raised her kids, continued to write and even managed to work as an editor with a small literary journal. "It was a jobette, really," she would recall. "I worked in a spare room upstairs. I became the Mother who Typed."
Shields was 40 upon the publication of her first novel, "Small Ceremonies," which included an admittedly personal self-description: "I am a watcher. My own life will never be enough for me. It's a congenital condition, my only, only disease in an otherwise lucky life."
Most American readers only learned about her after "The Stone Diaries," but Shields had long been popular in Canada. Among her fans was the acclaimed fiction writer Alice Munro, who sent a letter after "Small Ceremonies" came out and later became a friend.
Shields explored courtship, marriage, family and women's roles in society. Her characters often were creative people, such as the 40-year-old woman in "Happenstance" who discovers "she is an artist, and nothing in her life has prepared her for that knowledge."
Shields herself was creative with storytelling and style. In "Swann," her personal favorite, the final chapter is structured like a film script. "A Celibate Season," a novel of letters exchanged between a separated married couple, was co-authored with Blanche Howard. In "The Stone Diaries" she included photographs of her characters, gathering shots from museums, antique stores and a Parisian postcard market.
Shields also wrote short stories, plays and a short biography of Jane Austen for the acclaimed Penguin Lives series. "Unless," a novel about a Canadian writer whose eldest daughter becomes a street person, came out in 2002.
Shields was survived by her husband Don, and five children. Details of memorials planned in Victoria and Winnipeg, Manitoba, were pending.