The 53-year-old was hiking with two friends to Nepal's remote Upper Mustang region, an alpine desert with a maximum altitude of 3,840 metres (12,600 feet).
The group had stopped at a local hotel for the night when the victim fell unconscious on Sunday evening.
"His friends found him unconscious in the toilet... By the time they carried him to his room he had already passed away," said Harihar Nath Yogi, Mustang district's police chief.
Yogi said preparations were under way to airlift the trekker's body to Kathmandu for a post-mortem.
Altitude sickness strikes when people ascend too quickly, as the decreased atmosphere pressure causes headaches, fatigue and dizziness.
Nepal's snow-capped peaks make it a popular hiking destination, with around 150,000 trekkers visiting the Annapurna and Everest regions every year.
But the tourism industry has suffered in recent months after a 7.8-magnitude quake hit the Himalayan nation last April, killing nearly 9,000 and triggering a deadly avalanche on Mount Everest that killed 18 people including foreign climbers.
In October 2014, a massive snowstorm ripped across the Annapurna circuit, killing 43 hikers, guides and porters during peak trekking season.
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