In the summer of 1981, a tumor was discovered in Cheever's right kidney and, in late November, he returned to the hospital and learned that the cancer had spread to his femur, pelvis, and bladder. Cheever's last novel, Oh What a Paradise It Seems, was published in March 1982; only a hundred pages long and relatively inferior (as Cheever himself suspected), the book received respectful reviews in part because it was widely known the author was dying of cancer. On April 27, he received the National Medal for Literature at Carnegie Hall, where colleagues were shocked by Cheever's ravaged appearance after months of cancer therapy. "A page of good prose," he declared in his remarks, "remains invincible." As John Updike remembered, "All the literary acolytes assembled there fell quite silent, astonished by such faith." He died on June 18, 1982. The flags in Ossining were lowered to half staff for 10 days after Cheever's death.
In 1987, Cheever's widow, Mary, signed a contract with a small publisher, Academy Chicago, for the right to publish Cheever's uncollected short stories. The contract led to a long legal battle and a book of 13 stories by the author entitled Fall River and Other Uncollected Stories, published in 1994 by Academy Chicago Publishers. Two of Cheever's children, Susan and Benjamin, became writers. Susan Cheever's memoir, Home Before Dark (1984), revealed Cheever's bisexuality, which was confirmed by his posthumously published letters and journals. This was parodied to comedic effect in an episode of the TV sitcom Seinfeld in 1992, when one of the characters, Susan, discovers explicit love letters from Cheever to her father.
After Blake Bailey published his biography of Richard Yates, A Tragic Honesty (2003), Cheever's son Ben suggested he write an authoritative biography of Cheever. The book was published by Knopf on March 10, 2009, and won that year's National Book Critics Circle Award in Biography, the Francis Parkman Prize, and was a finalist for the Pulitzer and James Tait Black Memorial Prize.
Also in 2009, Cheever was featured in Soul of a People: Writing America's Story, a 90-minute documentary about the WPA Writers' Project. His life during the 1930s is also highlighted in the companion book, Soul of a People: The WPA Writers' Project Uncovers Depression America.