The woman, aged 53, was killed in a crash involving the car she was a passenger in and a pick-up truck on the A488.
The crash happened north of Clun at around 3.30pm on Saturday.
A spokesman for West Mercia Police said the woman, from Rotherham, had been a passenger in a blue Citroen C3 which was involved in a crash with a blue Isuzu TF Rodeo.
Police, West Midlands Ambulance Service and Mid and West Wales Fire and Rescue services all attended the scene and the road was shut for more than five hours.
Two women, also passengers in the Citroen, were treated for what ambulance officials have described as "potentially serious injuries".
They were both taken to hospital for treatment.
A spokesman for West Midlands Ambulance Service said: “We were called at 3.15pm to reports of a road traffic collision involving two cars on Colstey Bank, Coltey Clun, Craven Arms.
"Two ambulances, a paramedic officer and the Air Ambulance Service attended the scene.
"On arrival, we discovered three patients. The first patient, a passenger in the first car, a woman, was in a critical condition, despite the best efforts of ambulance staff on scene, it became clear that nothing more could be done to save her and she was confirmed deceased on scene.
"Two more patients, both women, passengers in the first car, were assessed and had sustained potentially serious injuries, they were conveyed to Royal Shrewsbury Hospital for further assessment. Nobody from the second car required assessment.”
Officers said the cars were recovered and the road was reopened around 9pm.
Police are asking anyone who may have seen the incident or who has dash-cam footage to get in touch.
Anyone with any information is asked to submit it on the West Mercia Police website quoting reference 402 of November 20.