The club's honorary president, who turned 88 this week, was reportedly taken ill after leaving a restaurant in Calle Juan Ramon Jimenez in the Spanish capital, and was rushed to the Gregorio Maranon hospital after being treated by paramedics.
It is understood the former striker suffered cardiac arrest and is now in intensive care.
A source from Madrid emergency services unit Samur told EFE: "A cardiac arrest was attended by Samur staff and they immediately transferred the patient to the Gregorio Maranon hospital."
Argentina-born Di Stefano won eight Primera Liga titles and five European Cups in a sensational decade at Santiago Bernabeu, in which time he scored over 300 goals in 396 appearances.
The former Spain international, who was made honorary president of the Spanish giants in 2000, suffered a minor heart attack in December 2005.