Police say Deborah J. Watts, 42, stabbed her 24-year-old niece in the leg around 11:00 p.m. in the 300 block of West Washington Street.
Watts then retreated back into the home and refused to surrender to police.
Police say Watts was believed to be in possession of two household knives and has a history of mental illness and criminally violent conduct in New Jersey and California.
After Watts refused to exit the home, members of the Gloucester County SWAT team were called and surrounded the home.
Around 2:30 a.m., officers fired tear gas into the home and Watts was then taken into custody.
She is charged with aggravated assault with a weapon, possession of a weapon for an unlawful purpose, unlawful possession of a weapon and criminal mischief. Bail was set at $25,000.
Late Saturday, she was placed in the Ann Klein Forensic Center, a state psychiatric hospital in West Trenton.
