It happened on the A92 near Parbroath crossroads, Luthrie, on Sunday afternoon.
The 67-year old driver was pronounced dead at the scene.
Her Toyota Yaris car was involved in a collision with a black Mitsubishi ASX.
A driver and passenger in the other car were both taken to Ninewells Hospital in Dundee for treatment.
The road was closed for around four and a half hours as officers carried out a full investigation.
Sergeant Colin Morrison, of Glenrothes Road Policing Unit, said: “Our thoughts are with the family and friends of the woman who has died in this crash and our enquiries are ongoing to establish the full circumstances.
“I am asking anyone who may have been in the area at the time and saw what happened or saw either car prior to the crash to get in touch.
“I would also urge anyone who has dash-cam footage that could assist with our investigation to contact officers.”
Anyone with information should call Police Scotland on 101, quoting incident number 2021 of 26 June.