NSW Police said they were called to the home in Queen Street, Stockton just after 8pm following reports of a shooting.
Police said the woman answered her front door before she was shot.
The woman died at the scene, and despite not yet being formally identified, she is believed to be 61-years-old.
Police said a crime scene had been established and specialist forensic police were probing the scene.
Detectives have launched Strike Force Backhouse to investigate the circumstances surrounding the incident.
NSW Police urged anyone with CCTV or dashcam footage from surrounding areas to contact Newcastle police or Crime Stoppers on 1800 333 000.