He went into business with his brother, Julio, in 1933, after the United States abandoned the prohibition of alcohol.
From humble beginnings, E & J Gallo Winery thrived with Julio making the wine and Ernest dealing with marketing.
It became the world's biggest wine-producing company, although it was later overtaken by Constellation Brands of New York.
Ernest Gallo died peacefully surrounded by his family in the Californian town of Modesto, where he was born almost 98 years ago.
With Julio, he founded the company in 1933 with less than $6,000, after learning about viticulture from their Italian immigrant parents.
They made $30,000 in their first year, and gradually expanded their business to include more vineyards, a glass plant, warehouses and distribution chains.
"My brother Julio and I worked to improve the quality of wines from California and to put fine wine on American dinner tables at a price people could afford," said Ernest Gallo, in an interview on his 90th birthday.
The company now sells an estimated 75 million cases of wine a year.
Ernest Gallo was a courteous but tenacious businessman, and he and his brother, who died in 1993, avoided publicity.
According to colleagues, this was because of their parents' violent deaths.
Joseph Gallo shot dead his wife Susie, and then killed himself in June 1933, two months before the brothers founded their business.
E & J Gallo Winery is now run by Ernest Gallo's son, Joseph.