The victim has been identified as 27-year-old Kristen Fink from the 4400 block of Decatur Street.
The accident happened around 10:47 a.m. Tuesday at the intersection of Frankford Avenue and Aldine Street.
Police say the school bus was traveling southbound on the 7300 block of Frankford Avenue at Aldine Street.
Fink was attempting to cross Frankford Avenue when she was struck by the bus.
She became trapped under the right rear tire of the school bus.
Witnesses told police the young woman was wearing headphones and not paying attention to the traffic.
"She was wearing headphones apparently crossing from east to west and then coming back across and for reasons we don't know why she walked in front of the bus," Philadelphia Police Captain John Wilczynski said.
Witnesses said she didn't hear the female bus driver frantically honking the horn until it was too late.
"The lady blew the horn and it startled her and she panicked and she went to run back the same way she came and the woman on the bus turned the same way to swerve and she hit her square in the middle of the bus," witness Michael Canning said.
Fink was pronounced dead at the scene by medics.
The school bus was not carrying any children because the driver was on a training run with a supervisor. Nobody on the bus was injured.
Police spent hours on the scene investigating, but it appears this was a tragic accident.
"It's just an unfortunate incident that happened," Wilczynski said.
The investigation is ongoing.