John Stewart tasted pop success when his best-known composition, Daydream Believer, was taken to the top of the charts by the Monkees in 1967. The song was later covered by everyone from Boyzone to U2, yet Stewart always regarded it as an unexpected blip in his long career, and it was as a thoughtful, sensitive performer steeped in the American folk tradition that he made his most enduring mark.

He established himself in the early 1960s as a member of the wholesomely clean-cut folk revival outfit the Kingston Trio, and although it sold only modestly his classic 1969 solo debut California Bloodlines is today credited with helping to launch the era of the sensitive singer-songwriter.

He had another big commercial success when he teamed up with Stevie Nicks, of Fleetwood Mac, on the hit single Gold, which made the US top five in 1979. Then he swiftly returned to what he did best, which was to write moving, vernacular songs about a lost America that drew deep on his folk and country roots.

Stewart recorded more than 40 albums, earning a cult following that spawned a magazine, Omaha Rainbow, after one of his most potent songs. His compositions were covered by Joan Baez, Nanci Griffith, Rosanne Cash and Mary Chapin Carpenter among others.

Born John Coburn Stewart in San Diego in 1939, the son of a Roman Catholic horse trainer from Kentucky, he grew up in the southern Californian cities of Pomona and Pasadena. As a child he often travelled to the race tracks with his father but from an early age his real love was music. By 10 he was playing the guitar and the banjo and had written his first song. Influenced by the early rock’n’roll records of Elvis Presley, he formed his first band, Johnny Stewart and the Furies, while still at school and released a single, Rockin’ Anna, on a tiny local label.

As rock’n’roll lost its initial energy and excitement, Stewart became caught up in the folk boom and in 1958 he formed the Cumberland Three with Gil Robbins (the father of the actor Tim Robbins) and John Montgomery. Heavily influenced by the Kingston Trio, at the time the best-selling US folk group, they recorded three albums before Stewart left in 1960 to join the Kingston Trio.

He replaced Dave Guard, a founder member, and he spent seven years with Nick Reynolds and Bob Shane, during which they made a dozen albums. But by the mid-1960s the trio’s preppy image and sanitised take on folk music was sounding hopelessly anachronistic at a time when performers such as Bob Dylan and the Byrds were busy creating a new and radical fusion of folk and rock.

After the Kingston Trio split up in 1967, Stewart discussed forming a duo with John Denver, who had just left the Mitchell Trio for the same reasons. Instead, he opted to record an album with his wife, Buffy Ford, Signals Through the Glass. In the same year the Monkees had a global smash with his Daydream Believer.

Cushioned by the royalties, Stewart launched his solo career in 1969 with California Bloodlines. Recorded in Nashville in the same week that Bob Dylan was in town cutting Nashville Skyline, the album is now regarded, alongside Dylan’s, as a seminal release in the development of the roots-based genre today known as Americana. Songs such as the title track, the much-covered July You’re a Woman and The Pirates of Stone County Road have stood the test of time wonderfully well and several decades later Rolling Stone magazine voted it among the best 200 albums of all time.

Yet despite his obvious talent and a devoted coterie of hardcore fans, Stewart’s records sold frustratingly poorly. That in the space of three years in the early 1970s he was signed successively by Capitol, Warner Brothers and RCA, three of the biggest players in the American record market, tells its own tale: all could see his talent but none could work out how to sell him to a mass audience. Arguably he fell between two stools: he lacked the hip angst of Jackson Browne or the outlaw chic of the Eagles, but at the same time he was still too quirkily maverick for the mainstream pop audience that his friend John Denver had found.

Albums such as Willard (1970), The Lonesome Picker Rides Again (1971), Sunstorm (1972), Cannons in the Rain (1973) and Wingless Angels (1975) were packed with good songs and caused a bunch of British fans to start the magazine Omaha Rainbow in his honour, but it was to little commercial effect. Moving to RSO Records and under pressure to deliver a hit, Stewart made a play for the kind of audience that was buying Eagles and Fleetwood Mac records by the million, upping the electricity on the 1977 album Fire in the Wind and touring with a group he dubbed “the loudest folk band in America”.

The ploy eventually paid off when Stevie Nicks added harmony vocals to several tracks on his 1979 album Bombs Away Dream Babies, including the top five single Gold. To the horror of many of his long-term fans, he even appeared miming the song on American television accompanied by the scantily clad Solid Gold Dancers writhing in the background.

Midnight Wind and Lost Her in the Sun, a couple of similarly Fleetwood Mac-influenced singles taken from Bombs Away, were minor hits, but the follow-up album, Dream Babies Go Hollywood (1980), flopped, and Stewart dropped off the commercial radar once more.

Rosanne Cash had a big hit in 1988 with his Runaway Train, but Stewart had no more hits. He continued to tour and record prolifically, self-releasing his albums or putting them out on small specialist folk labels such as Shanachie and Appleseed.

When his wife contracted a brain tumour in the 1990s, he endured a period of writer’s block. Happily, the dam was broken when she recovered, and a fresh set of fine compositions flowed out of him. His most recent album was The Day the River Sang (2006), and one of his final songs, I Don’t Drive Anymore, was written on hearing the news in 2007 that he was in the early stages of Alzheimer’s disease.

Stewart is survived by his wife, Buffy Ford, and four children.

John Stewart, folk singer, was born on September 5, 1939. He died of a brain haemorrhage on January 19, 2008, aged 68