In 1984, MGR fell sick and was rushed to the U.S. for treatment. Mass hysteria gripped Tamil Nadu and over 100 people attempted self-immolation. MGR died December 24, 1987 after his prolonged illness. His death sparked off an inexplicable frenzy of looting and rioting all over the state of Tamil Nadu. Shops, movie theaters, buses and other public and private property became the target of wanton violence let loose all over the state. The situation became so hopeless that the police had to resort issuing shoot-at-sight orders, something seldom seen or heard of in democratic India.

The violence during the funeral alone left 23 people dead and 47 police personnel badly wounded. This state of affairs continued for almost a month all over the state of Tamil Nadu, bringing normal life to a grinding halt and causing untold misery to millions.

Around one million persons followed his remains, around 30 followers committed suicide and lakhs of people had their heads tonsured. Some people in southern region of Tamil nadu still worship him as god. After his death, his political party, the All India Anna Dravida Munnetra Kazhagam, split between his wife Janaki Ramachandran and his political protege, J. Jayalalitha and later merged in 1988. In 1989 Dr. MGR Home & Higher Secondary School for the Speech & Hearing Impaired was established in the earstwile Ramavaram Gardens Residense as per his will dated 17 January 1986.