Armed police were called to reports of gun shots being fired on Shawclough Way in Rochdale, Greater Manchester, at about 21:50 BST on Tuesday.
A 35-year-old woman was found with knife wounds and treated by paramedics, but later died from her injuries.
Two men, aged 45 and 35, have been arrested on suspicion of murder, Greater Manchester Police said.
It was later established that the firearm involved was a BB gun, police said.
Supt Steve Howard said: "Our sympathies are with the family of the victim.
"We have specialist officers at the scene and we have local officers in the area providing reassurance to local residents.
"Understandably, there will be some disruption to local residents while the scene is examined and we will endeavour to keep that disruption to a minimum."
A murder investigation has been launched after a woman died from stab injuries following a disturbance.