Just a week-and-a-half ago, Obama suspended his campaign for two days to travel to Hawaii to pay a final visit to the ailing Madelyn Dunham, whom he called "Toot."
"She has gone home," Obama, 47, said at a rain-soaked rally Monday on the eve of the election in Charlotte, N.C. "And she died peacefully in her sleep with my sister at her side and so there's great joy as well as tears. I'm not going to talk about it too often because it's hard to talk about."
A statement released by Obama and Maya Soetoro-Ng, 38, said Dunham died after a battle with cancer. "She was the cornerstone of our family, and a woman of extraordinary accomplishment, strength, and humility," they say.
Republican rival John McCain and wife Cindy released a statement, saying: "We offer our deepest condolences to Barack Obama and his family as they grieve the loss of their beloved grandmother. Our thoughts and prayers go out to them as they remember and celebrate the life of someone who had such a profound impact in their lives."
In a campaign ad, Obama described his grandmother as the daughter of a Midwest oil company clerk who "taught me values straight from the Kansas heartland," and at the rally he called her "one of those quiet heroes we have all across America."
"She was the person who encouraged and allowed us to take chances," says the family statement. "She was proud of her grandchildren and great-grandchildren and left this world with the knowledge that her impact on all of us was meaningful and enduring. Our debt to her is beyond measure.
"Our family wants to thank all of those who sent flowers, cards, well-wishes, and prayers during this difficult time. It brought our grandmother and us great comfort. Our grandmother was a private woman, and we will respect her wish for a small private ceremony to be held at a later date. In lieu of flowers, we ask that you make a donation to any worthy organization in search of a cure for cancer."
Reporting by SANDRA SOBIERAJ