During the last years of her life, despite facing several health problems, Mother Teresa continued to serve the poor and needy and work for her Society and Church. By 1997, Mother Teresa’s Sisters numbered nearly 4000, working in about 610 foundations in 123 countries across the world. Her newly-elected successor was appointed the Superior General of the Missionaries of Charity, in March 1997. After meeting Pope John Paul II, she returned to Calcutta, where she spent her last weeks receiving visitors and giving instructions to her Sisters.

Mother Teresa suffered a heart attack in Rome in 1983, while visiting Pope John Paul II. After a second attack in 1989, she received an artificial pacemaker. In 1991, after a battle with pneumonia while in Mexico, she suffered further heart problems. She offered to resign her position as head of the Missionaries of Charity, but the sisters of the order, in a secret ballot, voted for her to stay. Mother Teresa agreed to continue her work as head of the order.

In April 1996, Mother Teresa fell and broke her collar bone. In August she suffered from malaria and failure of the left heart ventricle. She had heart surgery but it was clear that her health was declining. The Archbishop of Calcutta, Henry Sebastian D'Souza, said he ordered a priest to perform an exorcism on Mother Teresa with her permission when she was first hospitalised with cardiac problems because he thought she may be under attack by the devil.

On 13 March 1997, she stepped down from the head of Missionaries of Charity. She died on 5 September 1997.

At the time of her death, Mother Teresa's Missionaries of Charity had over 4,000 sisters, and an associated brotherhood of 300 members, operating 610 missions in 123 countries.These included hospices and homes for people with HIV/AIDS, leprosy and tuberculosis, soup kitchens, children's and family counseling programs, personal helpers, orphanages, and schools. The Missionaries of Charity were also aided by Co-Workers, who numbered over 1 million by the 1990s.

Mother Teresa lay in repose in St Thomas, Kolkata for one week prior to her funeral, in September 1997. She was granted a state funeral by the Indian government in gratitude for her services to the poor of all religions in India.Her death was mourned in both secular and religious communities. In tribute, Nawaz Sharif, the Prime Minister of Pakistan said that she was "a rare and unique individual who lived long for higher purposes. Her life-long devotion to the care of the poor, the sick, and the disadvantaged was one of the highest examples of service to our humanity." The former U.N. Secretary-General Javier Pérez de Cuéllar said: "She is the United Nations. She is peace in the world."