The actress was best known for her role as Olive in the 70s comedy On The Buses, and gained attention for her role as Aunt Sal, the sister of Peggy Mitchell (Barbara Windsor) in EastEnders.
Firefighters rushed to the scene at Windsor Road, Ilford shortly after 10.30pm on Tuesday.
Her family friend told Mail Online: “We are absolutely horrified at the news about Anna.”
A London Fire Brigade spokesperson confirmed: “Sadly, a woman has died following a house fire on Windsor Road in Ilford.
“Part of the ground floor of a mid-terrace house was damaged by fire. Sadly a woman was pronounced dead at the scene.
“The Brigade was called at 11.40pm and the fire was under control by 11.38pm. Three fire engines and around 20 firefighters from Ilford and Barking fire stations attended the incident. The cause of the fire is under investigation.”
Bucks Fizz singer, Cheryl Baker paid tribute to the late actress, saying: “I have just heard the awful news that my fabulous mate, Anna Karen has died in a house fire.
“What a horrific way to die, I can’t bear to think about it. I adored her – she was an absolute treasure, both on and off the screen.”
EastEnders star Rita Simons, who played Roxy Mitchell, also added: “I just heard the awful news about the wonderful Anna Karen. Horrific and awful and so so sad.
“She was one of the best. Sleep well lovely Anna. Sending all my love to her family and friends.”
Fans also took to social media to mourn her passing, one said: “Absolutely gutted to hear of the tragic end to Anna Karen. My thoughts are with her family and friends and this very sad time.
“Many thanks for the On The Buses memories.”
The actress moved to London aged 17 after growing up in South Africa.
After moving to London she enrolled in The London School of Dramatic Art.
In 1961, she made her screed debut in the naturists film, Nudist Memories.
She then played a small part in Ken Loach’s 1967 film, Poor Crow before appearing with her future EastEnders castmate, Barbara Windsor in Carry on Camping, in 1969.
It was her appearance on the hit British comedy, On the Buses, however, where Karen made her big break.
Karen married comic actor, Terry Duggan, in 1967 and had remained friends with Windsor until her death, and made one of her final public appearances at Windsor’s funeral last January.