The Prisons and Probation Ombudsman said 142 people died of natural causes in the past year while behind bars, half of whom were over 60. Some were more than 80 years old.
Pensioners are the fastest-growing age group in jails but experts believe this is a result of the ageing population in general rather than a "grey crime-wave".
Some prisons have even opened wings known as "secure nursing homes" to keep elderly inmates safe from younger criminals.
The watchdog said in its annual report: "The majority of deaths investigated were from natural causes: 142 deaths, a rise of 20 from the previous year.
"This continues an upward trend over recent years which may, in particular, reflect the fact that more prisoners now serve longer sentences, more prisoners are sentenced later in life and some prisoners display significant health deficits.
"This has led to an ageing and ailing population.
"In consequence, the past decade has seen deaths from natural causes replace self-inflicted deaths as the principal cause of death in custody."
In 2011-12 the ombudsman investigated 229 deaths in prison, immigration detention and probation premises in England and Wales.
This was the highest figure since it started keeping records in 2004 and a 15 per cent rise on the previous year.
Of these, 71 were apparent suicides - three involving children - and one was homicide, 142 were from natural causes.
Detailed figures show that 70 of them were over 60 years old. A quarter of these deaths (37) involved inmates who were aged between 61 and 70. A fifth (26) of those who died were between 71 and 80, and five prisoners were 81 or even older.
Investigations published by the ombudsman show the poor state of health suffered by some inmates.
One 70 year-old, who was in HMP Liverpool on remand, was found to have diabetes, a serious heart condition and mild depression. After being examined it was found he also had lung and bone cancer, and he died in hospital last May.