He returned home on Thursday and breathed his last on Friday night.
A statement released on behalf of his family, said: "It is with sadness we announce the death of Tom Alter, actor, writer, director, Padma Shri, and our dear husband and father.
According to Jamie, his son, Tom Alter was fighting cancer well and was showing the will to battle it out. Alter is survived by his wife Carol, son Jamie, and daughter Afshaan.
A down-to-earth citizen of Mussoorie
Tom Alter was the son and grandson of American Presbyterian missionaries who first came to India in 1916, grew up in north India in the towns of Rajpur and Mussoorie, and studied at Woodstock School.
He was a veritable treasure trove of knowledge. Tom's diction was impeccable. People describe their conversations with him as pure pleasure - with his deep baritone and impeccable English. They were often surprised by his Hindi and Urdu.
The American-origin Tom Alter - a true thespian
The multi-faceted man who found his zest for living undiminished, his love for acting inexhaustible and his cup of life brimming over! Alter was a true thespian. A consummate creative personality, Alter was an actor, playwright, director, sportsman, and philosopher.
Known for starring in television shows like "Bharat Ek Khoj", "Junoon", "Zabaan Sambhalke" and "Betaal Pachisi", Tom Alter had a flourishing career on stage, and on the big screen.
He has played pivotal roles in successful films like "Gandhi", "Shatranj Ke Khilari", "Kranti", "Aashiqui" and "Parinda".
In 2008, he was recognised with the Padma Shri, the fourth highest civilian honour of India.
He last featured in a television show "Rishton Ka Chakravyuh", and on the big screen, he was seen in "Sargoshiyan". He also shot for a short film "The Black Cat", in which he features as author Ruskin Bond.
 "Actor Tom Alter dies at 67 after long battle with skin cancer")