Syrio’s fate is completely unknown. However, speculation has run between his having been killed, his having been imprisoned, and his having been merely a disguise of a Faceless Man who was thrown into the black cells, changed into Jaqen H’ghar, and is now at large in Westeros. A Feast for Crows appears to put an end to this latter theory, as Jaqen H’ghar was apparently already in the black cells before Syrio’s confrontation with Meryn Trant.
In 2005, GRRM pointed out that Syrio seems to have been left in a hopeless situation when he was last seen, and suggested readers should "draw your own conclusions" based on this (SSM), which seems to imply that Syrio Forel was in fact killed. More recent reports (but, it should be said, unconfirmed) indicate GRRM does not understand why he gets asked the question repeatedly, pointing out that Syrio is not immortal; if accurate, this seems to more heavily imply that Syrio Forel is dead.