He was dropping his teenage son and daughter off in a Johannesburg suburb when he was attacked by car thieves.
Local radio stations have been flooded with tearful callers expressing outrage at the murder and renewing demands that the authorities act to curtail crime.
South Africa's leader paid tribute to him and called on people to "confront this terrible scourge of crime".
Alongside Bob Marley, Lucky Dube was thought of as one of the great reggae artists - singing about social problems.
He was also one of the apartheid regime's most outspoken critics.
'Freedom fighter'
Correspondents say the killing of the 43-year-old singer has shocked South Africans who are already accustomed to one of the highest murder rates in the world.
HAVE YOUR SAY "He will be missed as a great musician and for his love for the children and the suffering people in Africa" |
Music producer TK of TS records and a friend of Dube's told the BBC the killing was tragically ironic.
"The whole continent has lost a performer, musician, a guy that fought for freedom in his own way, in his own right, was just shot by some guy who wanted to take his car, you know, which is Mickey Mouse really," he said.
Opposition parties and the youth wing of the ruling African National Congress party have called on the government to take drastic measures against crime.
Callers to radio stations have urged the country's rugby team to show some form of respect when they take to the field in Saturday's World Cup final against England in Paris.
President Thabo Mbeki is attending the final and took time to pay tribute to the dreadlocked reggae star before he jetted off to France.
"It's indeed very very sad that this happens to an outstanding South African, an outstanding musician - world renowned," he said.
"We shall continue to act together as a people to confront this terrible scourge of crime, which has taken the lives of too many of our people - and does so every day."
The BBC's Mpho Lakaje in Johannesburg says police are still hunting for three men thought to be behind the attack.
Police say Dube's son and daughter were already out of the car when three shots were fired through the car window killing their father on Thursday evening in Rosettenville.
Witnesses say the wounded singer tried to drive away, but lost control of his car and hit a tree.
"He was declared dead on the scene," Police inspector Lorrain Van Immareck told the BBC.
'Big blow'
The BBC has been inundated with thousands of text and email messages paying tribute to the singer.
Lucky Dube's Rastas Never Die album was banned under apartheid |
"I am a 27-year-old black South African girl. I have dreadlocks and I love reggae music so much and I am proud to be who I am, being black and African. I will miss Lucky Dube, you are an inspiration to many of us," Sbongile Diko in Durban wrote.
But the tributes have been worldwide - especially from Africa.
"Lucky filled up stadiums all over the continent. I would say he was far bigger outside South Africa then he was in South Africa," South African music journalist Peter Makurube told the BBC's Network Africa programme.
Dube began his career by singing mbaqanga (traditional Zulu) music and recorded his first album with the Super Soul band in 1982.
He later moved into reggae, producing Rastas Never Die which was banned by the apartheid government.
His albums Slave, Prisoner and Together As One saw him gain first national, and then global, recognition.
Three years ago his 1989 anti-apartheid hit Together as One, which calls for world peace and harmony, was voted one of Africa's top 10 songs by BBC readers and listeners.
Lucky Dube released his most recent album, Respect, in April.