This article is from the of the muppets FAQ, by Craig Silverstein with numerous contributions by others.
No. No way, no how. No "Sesame Street" Muppet character is dead, dying, or planning to die. This is a rumor that has been circulating since Jim Henson died in 1990 -- people were afraid that since Henson died, the producers of "Sesame Street" were also going to make Ernie die on the show, so that children could learn about death (as they did when Will Lee, the actor who played Mr. Hooper, died). This rumor has since spread and mutated to include Bert, Grover, and other characters, and any number of diseases and fatal accidents. However, the producers have *no intention* of "killing" any character on "Sesame Street." Jim Henson's characters are kept alive on the show by rerunning sketches that were recorded in the first twenty years of the show, and new Ernie sketches are also being made with Steve Whitmire performing Ernie. Please help to stop this rumor when you hear it. Anyone who is afraid for the life of any character should be encouraged to actually watch an episode of "Sesame Street," where they will see Ernie, Bert, and all the gang, still alive and well.