He went ahead with the party, holding a minute's silence and telling the audience he was "personally devastated by the loss of someone who has meant so much to me for so many years".
Jazz legend Herbie Hancock, who was attending the event, said: "It's difficult not to be sad about it because it's a great loss. Her soul, her spirit, lives within all of us."
The hotel was already teeming with reporters and celebrities when police received an emergency call from hotel security at 15.43 local time (23:43 GMT), Beverly Hills police spokesman Mark Rosen told the BBC.
Police were dispatched, but paramedics who were already at the hotel because of the party attempted to resuscitate her, without success. She was pronounced dead at 15:55.
Mr Rosen said Ms Houston's entourage - comprising family members, friends and co-workers - had taken over much of the fourth floor of the hotel.
"There were a number of people on scene who were able to positively identify Ms Houston for us," he said, adding that her next of kin have been informed of her death.
Police investigators inspected the scene before Ms Houston's body was moved from the hotel to the coroner's office for an autopsy.
While the cause of death is unclear, Mr Rosen said there were "no obvious signs of criminal intent".
An autopsy is likely to be held within the next two days. However, if drugs or alcohol are involved, it will take between six and eight weeks for toxicology tests to be completed.
The US celebrity website TMZ.com reported that Ms Houston had been partying heavily on both Thursday and Friday nights.
I think we will choose to remember the good times the rich powerful voice and the beautiful movies like the bodyguard and others. Another example of how money and power can destroy how drugs and alchoal pull you down into depravity and sadness. We can only pray that you find peace now Whitney........ "We will always love you"
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