He was 81.
Taylor played a key part in what has become known as the "Canadian Caper," a covert operation by the Canadian government and the CIA to rescue six American diplomats who eluded capture during the seizure of the U.S. Embassy in Tehran.
The episode was made famous again by the release of the 2012 hit movie "Argo," loosely based on the real-life drama.
Students and militants stormed the U.S. Embassy on November 4, 1979, taking more than 50 Americans hostage. Just half a dozen evaded capture.
Taylor, along with Canadian immigration officer John Sheardown, hid those six envoys in their homes, protecting them until they could be spirited out of the country with Canadian passports in late January 1980.
"He always liked to say that anybody else would have done exactly what he had done. On the other hand, he did it," Taylor's son, Douglas Taylor, told CBC News. "And I don't think it was just simply a fact of his being there. It was, you know, a reflection of his character, and how he was able to handle an extremely difficult situation."
The son reportedly said his father had been diagnosed with colon cancer in August.
Canadian Prime Minister Stephen Harper honored Taylor in a statement, praising the former ambassador for risking his own life by shielding the diplomats from capture.
"Ken Taylor represented the very best that Canada's foreign service has to offer," Harper said.
Taylor was also recognized by the U.S. ambassador to Canada, Bruce Heyman, who shared the United States' thanks for his role in the hostage crisis.