The accident happened close to junction two southbound, near Rosyth, at about 20:00 on Saturday.
The 29-year-old woman who died was driving a Citroen C4 when it was in a collision with a Land Rover Discovery.
The female driver of the Land Rover was taken to the Victoria Hospital, Kirkcaldy, for treatment.
Her condition was described as stable.
A five-year-old girl and 18-month-old boy, who were travelling in the same vehicle, were also taken to hospital but neither was thought to have suffered life-threatening injuries.
The road was closed overnight for investigation work but has since reopened.
Police are appealing for anyone who witnessed the crash to contact them.
A woman has died and three other people, including an 18-month-old boy, were injured in a two-car crash on the M90 in Fife.