Missoni "passed away serenely" in his home in the town of Sumirago, north of Milan, where Missoni SpA is also based, the company said in a statement.
It was another sorrow for the family in a year that marks the 60th anniversary of their company's founding, following the disappearance in January of the Missonis' eldest child, company CEO Vittorio Missoni.
The 58-year-old disappeared with his wife and four others while flying in a small plane during a vacation to a Venezuelan island. They were never found, and the cause of the disappearance remains a mystery.
Known to friends by his nickname "Tai," Ottavio Missoni founded the company in 1953, along with his wife, Rosita Jelmini, who survives him. They went on to create a fashion dynasty, with the couple's three children and their offspring involved in expanding the brand.
"It was Tai and Rosita who founded, along with few others, Italian fashion in the 1950s," said Mario Boselli, chairman of the Milan Fashion Chamber who knew Missoni for decades. "We are speaking of a historical era, the start of ready-to-wear in Italy, that defined the success of 'Made in Italy.'"
Boselli described Missoni as "a pleasure, a marvel of great sympathy and great openness with an enormous human warmth."
Laura Biagiotti, who was among those early designers, said Missoni patterns "became almost a second flag for Italy."
"I have always admired Tai's vital energy, his joy in life, the ability to run a family and a company in a unique environment — a little magical, made of creativity, originality and most of all in the spirit of teamwork," said Biagiotti, who also made her name in knitwear, earning the moniker "Queen of Cashmere."
Born on Feb. 11, 1921, in what is now Dubrovnik, a picturesque Adriatic coastal city in Croatia, Missoni was fond of saying he came into the fashion business "by accident."
His wife's family owned a textile factory and produced shawls, and the newlyweds started their own business in 1953 with an artisan's shop producing knitwear in Gallarate, near Milan.
At the beginning, they produced athletic wear, likely inspired by Missoni himself, who had been a track-and-field star specializing in 400-meter relays and hurdles. He won several national medals, and competed in the 1948 Olympics, finishing sixth in the 400-meter hurdles after he hit an obstacle.
At the beginning of that decade, during World War II, he was taken prisoner during the battle of El Alamein, and held for four years by the British.
The brand got its first break in 1958, when the Rinascente department store commissioned 500 colorful vertically striped shirt dresses — the first to carry the Missoni label.
Missoni recalled in an autobiography published for his 90th birthday that one evening he and Rosita snuck down to view their creations displayed in the store window. The mannequins wore colorful blindfolds, and Missoni wrote that they heard a passerby remark: "Oh dear, poor things, thank goodness they covered the eyes because if they could only see themselves."
The criticism wasn't shared, and the Missoni brand gained quick popularity with its original striped and zig-zag patterns.
The company expanded, eventually constructing its main factory in Sumirago. But the philosophy of applying an artisan's eye to detail and precision continued to shape its fashion output, on the runways of Milan and in stores worldwide as the brand went global.
The Missonis, who often wore their own creations in everyday life, first showed their collection in Milan in 1966. The next year, a show in Florence of transparent tops sparked outrage, but they were ahead of a fashion trend that would later be picked up by no one less than Yves Saint Laurent, before spreading.
Missoni wrote later that his wife discovered just before the models were to go down the runway at the Pitti Palace that they had forgotten garments that we supposed to be worn under the sheer lame blouses.
"So, she sent them out without bras, and the lights made them transparent. The indulgent smiles and delight of the buyers and the guests contrasted with the protests of the organizers: 'What do they think, that Pitti Palace is the Crazy Horse cabaret?' And we weren't invited to the next shows," he wrote.
But the Missonis had their revenge, creating a literal and figurative splash in Milan the next year when a poolside show ended with everyone in the water.
Missoni recalled that the brand first caught the eye of fashion writers when Anna Piaggi wrote about it for a monthly printed by Mondadori publishing house in 1965. But soon, Missoni was spread across every major fashion magazine from Elle to Vogue, featured in The New York Times and lionized by Women's Wear Daily.
The brand opened its first boutique in the United States in 1970, and by the end of the decade Missoni knitwear was a must-have for the well-heeled. The media dubbed Missoni "the new status symbol of Italian design."
The brand's appeal in the United States has hardly cooled. In 2011, demand was so high for a Missoni limited edition line for Target that the retailer's website crashed.
Missoni's signature fashions have a reputation for wearability and for surviving many seasons of changing trends. Among the exhibits honouring the company was one by the Whitney Museum in New York. New York's Metropolitan Museum has also showcased Missoni creations. The house also has designed costumes for a production of "Lucia di Lammermoor" at La Scala starring Luciano Pavarotti and Luciana Serra.
Ottavio and Rosita turned over the business to their children in 1997. Missoni wrote that "it was time for a change" and that all three children had already "freely and spontaneously" inserted themselves into the company.
The couple's daughter, Angela, is the creative director, while their third child, Luca, has a technical role. The family won the admiration of the fashion community for their perseverance when they went on with their January menswear show just days after Vittorio went missing.
The fashion dynasty is expanding, too: Ottavio and Rosita's granddaughter, Margherita, has promoted Missoni perfume and starred in advertising campaigns.
D'Emilio and AP Fashion Writer Daniela Petroff contributed from Rome.