The actor was found by a screenwriter friend, David Bar Katz, reportedly with a needle in his arm and surrounded by bags of heroin.
Katz told the New York Times: ‘I saw him last week, and he was clean and sober, his old self… I really thought this chapter was over.’
The 46-year-old actor had previously struggled with drug addiction and had been sober for over 20 years before relapsing and checking into rehab last year.
The Oscar winner has starred in many successful movies, such as The Big Lebowski and Doubt. More recently he starred in the immensely successful Hunger Games series.
He won an the Oscar for Best Actor in 2005 for his role in Capote.
The makers of Hunger Games released a statement following his death.
‘Philip Seymour Hoffman was a singular talent and one of the most gifted actors of our generation. We're very fortunate that he graced our Hunger Games family.'
‘Losing him in his prime is a tragedy, and we send our deepest condolences to Philip's family.’
Philip was very well respected in Hollywood and in theatre circles and his death has sparked an outpouring of grief from fans and collegues.
Stars took to Twitter to pay their respects to the award winning actor.
Russell Brand wrote: 'love and prayers for Philip Seymour Hoffman's family. Addiction kills, I hope all those who need it have access to abstinence based recovery.'
Actress Anna Kendrick tweeted: 'Philip Seymour Hoffman. Unbearably, shockingly, deeply sad. Words fail to describe his life and our loss.'
Lily Allen made reference to the death on her Twitter, speaking out against drug use: 'Heroin never did anything for anyone. Just don't even think about it. It's bigger than all of us.'
The actor leaves behind his partner of 14 years Mimi O'Donnell, 10-year-old son Cooper, 7-year-old daughter Tallulah and 5-year-old daughter Willa.