According to Brazilian news sources, the rapper/singer was performing at a public housing building in the neighborhood of San Martin. Police say he died early Sunday after being brought to a nearby hospital.
No information has been released on potential suspects or whether any arrests have been made.
A Facebook artist page attributed to MC Daleste has been flooded with messages since the shooting. On Sunday an unnamed friend posted a statement calling Pellegrine a "victim of intolerance."
The friend goes on: "I hope God gives strength to the family, friends, and fans of my good friend MC Daleste, a guy who only wanted to convey joy to everyone through his music. It is a pity that the peace which we dream of, we often only get when we close our eyes."
MC Daleste was a member of the Sao Paulo-centered "Ostentatious Funk" scene, a bling-obsessed and violent brand of rap over looped beats. Also called Sao Paulo funk, the club genre is an offshoot of Rio's Funk Carioca, rooted in that city's impoverished favelas and known for its empowering conscious messages and sexy groove.
On "Apologia," one of MC Daleste's songs, he raps "killing the police is our goal" and recites a list of weapons over the continuous sound of gunfire.
"This is one more sad event in a long history of urban violence in Brazil," Sao Paulo native Béco Dranoff, a New York-based DJ and the producer of the "Red Hot + Rio" project and albums by Bebel Gilberto and other Brazilian artists told Billboard. "Music should be the peaceful medium that connects us all for good times and for change,"
After the shooting, some funk MCs took to Twitter to call for a stop to the violence.
"Soon an MC will have to start performing with a microphone in one hand and an automatic in the other," said MC Buru.
"Funk asks for peace," Tweeted the performer known as MC Neghino da Caxeta.
"Let's start a 'funk has awoken' movement," urged MC Rodolfinho, referring to the current mass social protest movement in Brazil which have been deemed "The Giant Has Awoken."
Police in Campinas, located in the São Paulo State in Brazil's Southeast region, told Brazilian media Monday that videos taken of the shooting Saturday night were the focus of their investigation as they searched for Pellegrine's killer.