DeWitt Wallace, 91, the founder of The Reader's Digest, an institution as much as a magazine and one of the most successful pubishing ventures in history, died of pneumonia Monday at High Winds, his estate in Mount Kisco, N.Y.

He underwent surgery for an abdominal obstruction at Columbia Presbyterian Hospital in New York City three weeks ago and was at home recuperating when his death occurred.

Mr. Wallace got the idea for The Reader's Digest -- publishing condensations of articles of lasting interest that had appeared in other magazines, but his partner in bringing out the first edition -- 5,000 copies in February 1922 -- and then making it almost part of the furniture in the waiting rooms of thousands of doctors and dentists offices and in millions of homes in the United States and around the world was his wife, the former Lila Bell Acheson, whom he married in 1921 and who survives him.

The Reader's Digest now has a circulation in this country of about 18 million copies a month. It als appears in 16 languages in 162 other countries and this circulation is about 12.5 million a month. Readership is estimated at more than 100 million. Since 1950, the enterprise had had a book division, Reader's Digest Condensed Books. Five times a year it publishes a volume containing shortened versions of four or five books. About 12 million copies a year are sold in the United States and millions more abroad. The company also has a film division.

The Digest retains much of its original flavor: bland, helpful, optimistic, soft-spoken, informative on matters ranging from sex to religion to science, didactic, perhaps, on such matters as the evils of smoking and crime and the virtues of a strong national defense. At first, publishers of other magazines were happy to have their articles cut and reprinted for free. When the success of the Digest was assured, it began paying for reprinting rights. For many years, it also has had its own writers. Sometimes their work was sold to other publishers and then reprinted in the Digest.

On political matters, Mr. Wallace generally supported Republicans. Years ago, he conceded that his magazine had been critical of the New Deal of President Franklin D. Roosevelt. But he added: "And it will be anti-Republican, too, if we ever get a Republican administration. It's the business of a magazine in a democracy like America to be critical of whatever government is in power."

Altogether, according to an estimate published in The New York Times in 1977, the Digest and it various parts gross more than $790 million annually. This would put it in about the middle of the Fortune 500 list of the largest corporations in the country. The actual value is not known since the stock is not publically traded. All of it is owned by the Wallaces.

They have used their fortune for beneficenes on a grand scale. In addition to supporting medicine, civic works and education in general, the principal recipients of their generosity have included the Metropolitan Museum of Art in New York and Macalester College in St. Paul, Minn., of which Mr. Wallace's father, James, a Presbyterian and a doctor of divinity, was president. It is estimated that the Wallaces have given away $40 million since 1950. They also have a substantial collection of art that runs heavily from impressionists to the post-impressionists and Picasso.

Until 1973, Mr. and Mrs. Wallace were cochairmen of The Readers Digest. Since then, they have remained members of the board. In 1972, both received the Freedom Medal, the nation's highest civilian award.

The whole marvelous edifice was conceived by Mr. Wallace while he was recovering from wounds received in World War I, brought into being in a cellar in Greenwich Village in New York City, and finally moved to a barn and another building in Pleasantville, N.Y., a suburb of the city where the headquarters of the Digest still are located.

DeWitt Wallace was born in St. Paul, Minn., on Nov. 12, 1889. It is said he showed an early interest in business, raising chickens and running an electrical repair service. He attended Macalester College, where he was a noted athlete (even in his 80s a form of exercise he enjoyed was using a sledgehammer to work on the roads of his estate), but left in 1909 after only two years. He then went to the University of California at Berkeley.

There a classmate, Barcley Acheson, took Mr. Wallace home to Tacoma, Wash., for Christmas and introduced him to the Acheson sisters. One of them turned out to be the future Mrs. Wallace.

It was several years before that seemed even a remote possibility. In 1912, Mr. Wallace returned to St. Paul and went to work for the Webb Publishing Company, publishers of agricultural text books. While selling the texts, Mr. Wallace conceived the notion of publishing an annotated list of free pamphlets available to farmers through federal and state agencies. He called it "How to Get the Most Out of Farming" and sold 100,000 copies to banks and other outlets for free distribution to their farmer customers.

This is said to have been the seed from which The Reader's Digest grew.

When the United Stated entered World War I in 1917, Mr. Wallace was selling novelties in St. Paul. He went into the Army and was wounded in the Meuse-Argonne offensive. While in the hospital, he read magazines and practiced condensing articles. A part of the exercise was to gain experience in spotting pieces that would have "lasting interest."

After the war, he went to work for Westinghouse Electric in Pittsburgh. He was fired during the post-war depression and went back to the idea of the Digest.He had met Lila Acheson again in St. Paul after the war and she was one of the few who encouraged him. (William Randolph Hearst is said to have been among the established publishers who thought the idea would never work). Mr. Wallace and his fiance went to work in New York City. When they returned from their honeymoon -- they were married in Pleasantville on Oct. 15, 1921, by barclay Acheson, the same brother who had introduced them and who became a Presbyterian minister -- they had 1,500 subscriptions at $3 a year for 12 issues, each of which was to contain 31 shortened articles. aSo the venture was launched.

Mrs. Wallace did the initial selecting Mr. Wallace exercised a kind of overall editorial control and did most of the cutting. His wife helped him with this work. They really were interchangeable.

By 1929, they had 216,190 subscribers and a gross income of over $600,000. Their first foreign venture was a British edition launched in 1938. It is said that it promptly gained the highest circulation of any magazine in the British Isles. There followed editions in Spanish, Arabic and other major languages. The most recent language to be added is Hindi.

When they gave up active direction of the Digest in 1973, the Wallaces spent much of their time at their estate in Mount Kisco.

In addition to his wife, Mr. Wallace's survivors include a brother, Robert, of Bradenton, Fla.