Police arrested Agustin Macias-Marquez, 27, after he crashed his car into another vehicle carrying three people, one woman and two men.
Police say it happened just after midnight at the intersection of McKinley Street and Cleveland Avenue.
They say the woman was pronounced dead at Chambersburg Hospital, while the two men were flown to York Trauma with serious injuries.
Macias-Marquez has been charged with homicide by vehicle while driving under the influence.
Police have yet to release the identity of the victim, pending notification of the family.