Challis, 79, best known for his unforgettable portrayal of the snooty car salesman Boycie in Only Fools and Horses, died in his sleep at the weekend after a long battle with cancer.
The actor lived on the Shropshire border and the county had become his adopted home, quoting Ludlow as one of his favourite places.
A statement from his family confirmed the news, saying: "It is with heavy hearts that we bring you such sad news. Our dear friend and yours, John Challis, has died peacefully in his sleep, after a long battle with cancer.
"He will always be loved for being 'Boycie' and leaves a great legacy of work that will continue to bring pleasure and smiles for many years to come.
"Please respect the privacy of John's family and friends at this difficult time, and be assured that in the future there will be an occasion to celebrate John's life – when everyone will be welcome to come along."
Sir David Jason, who played Del Boy in Only Fools and Horses, described Challis as "a gentleman in the true sense of the word".
Challis' on-screen wife from the show, the feisty Marlene – played by Sue Holderness, also spoke of her sadness at the loss.
She said: "Marlene without Boycie – it's unthinkable. John Challis was my partner on screen and stage for 36 years and my beloved friend. R.I.P. darling John. I will miss you every day."
Although best known for Only Fools and Horses and the spin-off The Green Green Grass, Challis enjoyed a hugely successful career, illuminating scores of roles.
Despite displaying early talents for acting and mimicry at school, Challis' headmaster actually talked him into getting a ‘proper job’ – but after a brief and unsuccessful stint at an estate agency, he spotted an advertisement in the performing arts publication, The Stage.
“They were looking for someone to join their travelling theatre, saying no previous acting experience was necessary, but a driving licence would be helpful. Well, the driving test was one of the few exams I ever passed in my life, so I applied,” he said.
It turned out to be life changing. After going from town-to-town in the back of a small van, playing a different character every day, he was revelling in the chance to showcase his vocal skills, convinced he had found his vocation.
“Life with the children’s theatre could be incredibly schizophrenic at times,” he recalled. “I remember one occasion when I was playing Jack the Ripper at night, but rehearsing for the archangel Gabriel during the day!”
After making his debut in the West End in the early 1960s, he soon found himself at the Royal Shakespeare Company, treading the boards at Stratford.
One memorable occasion was in 1966, on the day of the World Cup final, when he was booked in for a matinee of Twelfth Night.
“An electrician set up a flickering little black and white telly in the band room under the stage, and every time we came off stage we would rush in there shouting ‘what’s the score?’ Those were great times.”
With television now coming around the corner, Challis was lucky to get a role in one of the first TV soaps, The Newcomers.
It was around this same time, though, that he heard The Beatles were in town and looking to cast a role in their Magical Mystery Tour production – another story he always used to tell on tour.
He went up for the job, hit it off immediately with John Lennon, and ended up getting offered the role – despite admitting to the fab four during the audition that he preferred The Rolling Stones!
Unfortunately, the shooting dates slightly overlapped with The Newcomers, and the BBC refused to release him from his contract, so he ended up turning it down.
“That was a big disappointment, but you just have to dust yourself down and get on with it,” he recalled.
And that’s what he did. A series of cameo roles followed on TV shows, including a football hooligan on Coronation Street who threw Ena Sharples’ handbag through a shop window, and a part as a delivery driver in the comedy Open All Hours, with a certain man called David Jason.
After trying his luck in America in the early 1970s and appearing on Broadway, he was enticed back to the UK to take on a role as a policeman in cult comedy Citizen Smith – written by John Sullivan.
Sullivan was so taken with the snooty, aloof characterisation he brought to the role that he told him ‘I’m going to use that again some time’ – and sure enough, about a year later, along came a script for the first series of Only Fools and Horses.
As the show became a record-breaking success, Challis always had time for the fans, delighting them with video messages including that trademark machine-gun laugh.
Some stars come to resent the characters which catapult them to worldwide fame – but he chose instead to embrace and enjoy it.
In all, Challis appeared in around half of the Only Fools episodes, becoming an integral part of some of the most popular episodes, like the poker-playing episode A Losing Streak, The Jolly Boys’ Outing which was one of his favourites, and the Batman and Robin episode.
When the original Only Fools run came to an end in 1996, he and his wife Carol wanted to leave London, and bought the abbot’s lodging at the ruined Wigmore Abbey near Leintwardine.
He became an adopted Salopian from that point on, quoting Ludlow as one of his favourite places – and when the Boycie spin-off The Green Green Grass was commissioned, much of it was filmed around his house, and other sites in south Shropshire.
Since 2014 he had been regaling delighted fans with stories of his career on a travelling ‘Only Fools & Boycie’ theatre tour.
He completed the first of what was due to be a 30-plus date 2021 tour on September 3 at Stourport-on-Severn, but had to cancel all remaining dates due to ill health.
Jim Sullivan, son of Only Fools and Horses creator John Sullivan, spoke of his sadness at the loss, saying: “We are incredibly sad to hear that John Challis has passed away. For over four decades John was an integral and much-loved member of the Only Fools and Horses family.
“John brought his own unique touch to the character of Boycie, bags of charisma and charm, and of course, that unmistakable trademark laugh.
“My dad loved that laugh and from the first time he heard it would always include a ‘Boycie does one of his laughs’ in the script stage directions.
“Away from the cameras, John was an immensely kind, witty and erudite man. He will be missed enormously, and our thoughts are with his wife Carol and the rest of his family.”
Challis' post-Boycie career included other popular TV roles including Monty Stained in ITV comedy Benidorm, and Captain Peacock in the reboot of department store comedy Are You Being Served?
But one of his final triumphs, just days before his death, was the news that he had been granted Serbian citizenship.
Shortly before lockdown he had been invited out to Belgrade to discover why Only Fools and Horses is so popular in the Balkans, and ended up making a documentary, Boycie In Belgrade, which was shown at the country’s cinemas.
Prime Minister Ana Brnabic agreed to grant him honorary citizenship, which was announced earlier this month.
A delighted Challis said: “I was just flabbergasted.”