Hamilton died Tuesday at his home in Portland, Ore., of complications from congestive heart failure, his family said.
The image of God as all-knowing and all-powerful couldn't be reconciled with human suffering, especially after the Holocaust, Hamilton said.
"I wrote out my two choices: 'God is not behind such radical evil, therefore he cannot be what we have traditionally meant by God' or 'God is behind everything, including the death camps — and therefore he is a killer.'"
He discovered that he no longer believed in an active God.
"The death of God is a metaphor," Hamilton said. "We needed to redefine Christianity as a possibility without the presence of God."
The idea was not a new one, said fellow radical theologian Thomas J.J. Altizer. Poet William Blake and German philosopher Georg Wilhelm Friedrich Hegel had long ago raised the question.
Hamilton "was what we call a radical Christian, or if you like, an atheistic Christian," said Altizer, who was co-author with Hamilton of the 1966 book, "Radical Theology and the Death of God."
The book and the ensuing 1966 Time magazine article "Is God Dead?" became part of a national questioning of establishment values. They also made Hamilton a pariah at Colgate Rochester Divinity School, a liberal Baptist theological school in Rochester, N.Y.
Despite holding an endowed chair and full tenure, Hamilton was no longer allowed to teach and left for a new job at New College in Sarasota, Fla., said Ronald Carson, a student of Hamilton's at the time and now an emeritus professor of humanities at the University of Texas.
"He rose to the occasion of the notoriety and made, I think, wonderful educational use of it, trying to clarify what this means, encouraging other people to try to think it through," Carson said.
He explained the concept as "not about the beyond. It's about living a good life. Bill would say, 'Pay attention to the Christian story. Reread the Sermon on the Mount.'"
Hamilton left New College in 1970 and became dean of arts and letters at Portland State University, teaching a wide range of subjects until he retired in 1986.
He continued writing, producing books on William Shakespeare and Herman Melville. His most recent work, a collection of essays on religious themes titled "Sine Nomine," was published last fall.
Born March 9, 1924, in Evanston, Ill., Hamilton was raised a Baptist and went to Oberlin College before joining the Navy during World War II. After the war he enrolled at Union Theological Seminary in New York City.
Hamilton married ballet dancer Mary Jean Golden, and together they went to Scotland, where Hamilton earned his doctorate in theology at the University of St. Andrews.
Besides his wife, Hamilton is survived by five children, eight grandchildren and four great-grandchildren.