The woman, named locally as Michelle, was killed when a fire broke out at the house in Beacon Lane, Sedgley, at around 2.30pm on Saturday. She was one of three people inside.
Heroic neighbours and passers-by rushed to help, climbing a ladder to reach the first floor of the two-storey house, but were unable to rescue Michelle in the few minutes before fire crews arrived.
Emergency services treated the 43-year-old but she was declared dead at the scene.
Meanwhile a 16-year-old girl and a 49-year-old man survived and were taken to hospital, where the girl remained in a serious condition on Sunday.
The girl suffered serious burns but the man has since been discharged.
The circumstances surrounding the fire are being investigated, West Midlands Police confirmed, with the cause of the blaze not yet confirmed.
Investigators from both the police and fire service remained at the scene on Sunday morning, where major damage was visible in every part of the house.
Witnesses described how the fire consumed the house, with flames leaping out of the first floor windows and smoke billowing into the sky.
A resident who lives nearby and asked to remain anonymous said: “All of a sudden I heard a load of sirens.
“I thought what is going on? And rushed out the front door and down the street and saw a load of smoke coming from a house.
Watch: Firefighter says severity of blaze was 10 out of 10
“There were firefighters, ambulances and half a dozen police cars at least.
“The fire had just taken over the whole house, it was coming out the top windows.
“We were all really scared."
Police were sent and a large cordon was put up around the area throughout Saturday afternoon as an investigation into the tragedy began. Beacon Lane was closed from the junction of Beacon Rise and Monument Lane and Cross Lane.
Meanwhile a fundraiser for the family involved has already raised more than £5,000 from 326 donors.
Michelle Allen, who created the GoFundMe page, said she was one of the first on the scene.
"I live local and I know a lot of the community had a lot of love for this family especially Michelle and Rosie," she said.
"This family now has no home, or anything to their name so let's try and raise as much as we can to help them in anyway, this is what Michelle would have wanted, she had the biggest heart and helped so many people who needed it."
Detective Inspector Carla Thompson, said: “We are working closely with the fire service to determine what happened. I would urge anyone with information to get in touch.
“Our thoughts are with the family of the woman at this difficult time who are being supported by specialist officers."
Four fire engines were called to the scene at 2.37pm yesterday, West Midlands Fire Service said.
Anyone with information is asked to contact police online or by calling 101 quoting log number 2291 of May 8. Alternatively Crimestoppers can be called anonymously on 0800 555 111.