Epstein, 66, admitted prostituting minors in 2008 and spent 18 months in prison – and was arrested again on July 6.
He was facing fresh charges of sex trafficking and conspiracy and could stand trial next year.
If convicted, he would have died in prison – facing 45 years behind bars.
The billionaire financier is suspected of running a massive network of sex trafficking in which he would trade underage girls.
He was found hanged this morning in his cell and is believed to have taken his own life, reports US media.
His body was found at 11.30 GMT on the floor of his cell in New York.
Epstein – who was friends with Prince Andrew – had pleaded not guilty to sex trafficking charges involving dozens of girls as young as 14, from at least 2002 to 2005.
The mogul had moaned about conditions in jail and had appealed to be placed under house arrest rather than in prison.
He wanted to be able to stay at his £64 million mansion in the plush Upper East Side of Manhattan.
The federal judge however denied his request – saying he posed a danger to the community in released before his trial.
Prosecutors also said there was a high risk Epstein would use his wealth to flee from his charges.
Epstein’s death however means he will now never face justice for his alleged crimes.
His death came less than three weeks after he was found unresponsive in his cell at Metropolitan Correctional Center.
He was placed on suicide watch after being found with “marks on his neck” which were understood to be appear to be self-inflicted.
Prosecutors have accused Epstein of arranging girls under age of 18 to perform nude massages and other sex acts.
He is also said to paid some his girls to recruit others in a vast network of paedophilia.
Lawyers said he sexually abused dozens of underage girls between 2003 to 2005.
Epstein had denied the current charges against him.
Epstein started life as a maths teacher, before moving into work on Wall Street after meeting on his student’s parents – quickly amassing a fortune.
The billionaire had numerous powerful and influential friends – including Bill Clinton and US President Donald Trump.
Trump has claimed he has not had contact with Epstein for more than a decade.
He previously served 13 months behind bars but spent much of that time on work release.