Saudi state television says King Abdullah has died at the age of 90.
Saudi Arabia's King Abdullah died early on Friday and his brother Salman became king, the royal court in the world's top oil exporter and birthplace of Islam said in a statement carried by state television.
King Salman has named his half-brother Muqrin as his crown prince and heir, rapidly moving to forestall any fears of a succession crisis at a moment when Saudi Arabia faces unprecedented turmoil on its borders.
The rise of Islamic State in Iraq and war-torn Syria has brought to the kingdom's borders a militant group that vows to bring down the Al Saud dynasty.
In Yemen, the Iran-allied Shi'ite Houthis have all but seized power and plunged the country to the brink of total chaos, opening space for al Qaeda, which waged an insurgency in Saudi Arabia from 2003-06 and nearly killed a top prince in 2009.
The problems in all those countries are being played out against an overarching backdrop of bitter rivalry between Sunni Muslim Saudi Arabia and its arch regional foe Shi'ite Iran at a moment when oil prices have more than halved since June.
"His Highness Salman bin Abdulaziz Al Saud and all members of the family and the nation mourn the Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz, who passed away at exactly 1 a.m. this morning," said the statement.
Abdullah, said by the Saudi embassy in Washington to have been born in 1924, had ruled Saudi Arabia as king since 2006, but had run the country as de facto regent for a decade before that after his predecessor King Fahd suffered a debilitating stroke.
At stake with the appointment of Salman as king is the future direction of the United States' most important Arab ally and self-appointed champion of Sunni Islam at a moment of conflict and turmoil across the Middle East.
Abdullah played a guiding role in Saudi Arabia's support for Egypt's government after the military intervened in 2012, and drove his country's support for Syria's rebellion against President Bashar al-Assad.
King Salman, thought to be 79, has been crown prince and defence minister since 2012. He was governor of Riyadh province for five decades before that.
By immediately appointing Muqrin as his heir, subject to the approval of a family Allegiance Council, Salman has moved to avert widespread speculation about the immediate path of the royal succession in the world's top oil exporter.
LONG TERM CHALLENGES
Abdullah pushed cautious changes in the conservative Islamic kingdom including increased women's rights and economic deregulation, but made no moves towards democracy and was a hawk on policy towards rival Iran.
King Salman has been part of the ruling clique of princes for decades and is thought likely to continue the main thrusts of Saudi strategic policy, including maintaining the alliance with the United States and working towards energy market stability.
During his five decades as Riyadh governor he was reputedly adept at managing the delicate balance of clerical, tribal and princely interests that determine Saudi policy, while maintaining good relations with the West.
"I think he will continue with Abdullah's reforms. He realises the importance of this. He's not conservative in person, but he values the opinion of the conservative constituency of the country," said Jamal Khashoggi, head of a news channel owned by a Saudi prince.
"King Abdullah was willing to challenge the conservatives, but not to crush them. Salman respected the status quo. He wanted reform but was very much connected to the tribal mentality, the conservative nature of his constituency," he added.
In the long term Saudi rulers have to manage the needs of a rapidly growing population plagued by structural unemployment, and an economy that remains overly dependent on oil revenue and undermined by lavish subsidies.
But more imminently Riyadh, which is locked in a power struggle with regional foe non-Arab Shi'ite Iran, also faces threats from radical Sunni Islamists both at home and across its borders in Yemen, Iraq and Syria.
Saudi Arabia, which holds more than a fifth of the world's crude oil, also exerts some influence over the world's 1.6 billion Muslims through its guardianship of Mecca and Medina, Islam's holiest sites.
Most senior members of the ruling al-Saud family are thought to favour similar positions on foreign and energy policy.
Incoming kings have traditionally chosen to appoint new ministers to head top ministries like oil and finance.
In a country where the big ministries are dominated by royals, successive kings have kept the oil portfolio reserved for commoners and insisted on maintaining substantial spare output capacity to help reduce market volatility.
A Saudi businessman in Jeddah told Reuters: "People are very sad because they loved him very much. He was a father figure, sincere, and truly a king. He was always trying to be the arbitrator. He kept his word and was known for his loyalty."