Alexandra "Sasha" McHale died Saturday, and the team disclosed no other details Sunday.
Kevin McHale has been on leave since Nov. 10 to deal with what the team called a personal family matter. The Houston Chronicle reported she had battled lupus, an auto-immune disease, for a long period of time and had been hospitalized with a related condition.
During his absence, Kelvin Sampson has been the interim coach. There is no timetable for Kevin McHale's return.
Team owner Leslie Alexander said in a statement that he extends his "deepest condolences" over the loss of the McHales' "beautiful daughter." He called Kevin and wife Lynn "loving and dedicated parents who will need our continued support throughout this very difficult time." He said the "entire organization is mourning."
Some of the Rockets expressed their support for McHale.
McHale spent several years with the Minnesota Timberwolves as a coach and executive before joining the Rockets following two seasons as a television analyst.
"While Kevin was with our organization, we all watched Sasha grow up and become an outstanding young woman," Timberwolves owner Glen Taylor said in a statement. "She will be sorely missed by her family and friends."
Information from The Associated Press is included in this report.