Sir Charles dies of a heart attack, but he is really murdered by his neighbor Mr. Stapleton.

Charles Baskerville died in a “sudden and tragic death,” and it was his death that led to Sherlock Holmes being hired.  Apparently, the poor man had a bad heart and was frightened by a dog that he thought was the Hound of Hell—the Hound of the Baskervilles.  You see, his evil neighbor Mr. Stapleton moved in and tried to get his money, feeling he was the one who was truly worthy of the estate.  He decided to use the story of the hound to scare Henry, killing him and then getting the land and manor.

Sir Charles lay on his face, his arms out, his fingers dug into the ground, and his features convulsed with some strong emotion to such an extent that I could hardly have sworn to his identity.  There was certainly no physical injury of any kind. (Ch. 2)

There are paw prints found at the scene of the "crime" and no human ones.  Of course, you can kill a man from fright, without raising a finger.  All Stapleton, the naturalist, had to do was get an abnormally large dog and paint it with phosphorous, and then set it loose in Sir Charles's direction to scare him. His heart was bad, so poof, heart attack.

Of course, we know none of this at the outset.  All we know at first is that there is the legend of Hugo Baskerville, the bad boy, who created the local legend that generated the hound.  From this we get Sir Charles’s weak heart.  We also know that there were sightings of a strange dog, a supernatural dog, and that things are spooky on the moor.

Sherlock Holmes is hired, but he is much too busy.  He dispatches Watson, his trusty friend and assistant, to go to Baskerville Hall to see what is going on.  Watson investigates and sends back meticulous reports.  He knows it is no supernatural hound.  All the while, Sherlock Holmes is secretly hiding on the moor.  Eventually we learn what really killed Sir Charles.  It was nothing supernatural at all—just an evil neighbor, trying to get his fortune.