Pastorius suffered from drug addiction and mental health issues, and despite his widespread acclaim, over the latter part of his life he had problems holding down jobs due to his unreliability. In frequent financial difficulties, he was often homeless in the mid-1980s. He died in 1987 as a result of injuries sustained in a fight outside a South Florida after-hours nightclub.

Since his death, his work has continued to be widely influential. He was elected to the DownBeat Hall of Fame in 1988 and was the subject of the 2014 documentary film Jaco.