"She made her journey peacefully with her daughters and nieces by her side", a statement from the family said.
Lipton had previously been diagnosed with colon cancer in 2004. By age 19, she was getting bit parts on television shows such as "Bewitched".
She and Clarence Williams III made cameo appearances in a 1999 big-screen version of "The Mod Squad" that starred Claire Danes, Omar Epps and Giovanni Ribisi.
Lipton was a fan and critic favorite earning four Emmy nominations and a 1971 Golden Globe win as best actress.
Lipton was born in New York City and began her career as a model when she was 15-years-old.
Rashida Jones is best known for her roles on "The Office" and "Parks and Recreation". Most recently, she could be seen in the movie A Dog's objective and reprised her role as Jennings in Twin Peaks 2017 revival season.
She later married music producer Quincy Jones in 1974 before giving birth to their daughters.
"My mom is so empathetic towards my dad, but it also was incredibly raw for her to go through what she went through and admit that the relationship didn't work out", Rashida Jones told EW past year. I absolutely fell in love with her.
After her death, stars have come forward to share messages in mourning of Peggy Lipton. "You couldn't fit anymore love into that gorgeous soul of hers and she shared her heart generously with everyone around her", the Riverdale star wrote of Lipton.
At the time of her death, Peggy Lipton had a net worth of $3 million.
Speaking about the challenge in 1993, Lipton explained: "I had a push-pull thing inside me that I wanted to do it".
The original Twin Peaks only aired for two seasons, but has since gained a cult following.