The 55 year old was found dead in her Park Avenue apartment at 10:20 local time (15:20 BST) by her housekeeper, a law enforcement official said.
Kate Spade was well known as a designer of clothes, shoes, and jewellery, but was best known for her accessory line. She co-founded Kate Spade Handbags in 1993 with husband Andy Spade.
The company opened its first store in New York in 1996, and now has more than 300 branches worldwide.
It is recognisable for its distinctive logo which features the spades playing card symbol, in reference to the designer’s surname.
The company’s bright and colourful patterned designs became a trademark of its products.
It was bought last year by New York rival designer Coach in a deal worth $2.4bn (£1.8bn).
Kate Spade legally changed her name to Kate Valentine (Valentine was her grandfather’s middle name) to “separate the two worlds”.
The New York Police Department confirmed her death under her birth name, Katherine Noel Brosnahan.
News of her death has led to many tributes to her work.