The shooting happened around 3:30 a.m. near South Clifton and Aldan avenues in Aldan Borough.
Sources said the man had contacted authorities for a police assist, essentially requesting a ride.
A female officer responded to the call and encountered the man outside a home armed with a knife, according to investigators.
Borough officials said the officer first attempted to use her Taser before firing her weapon.
A nearby resident said the sound of the confrontation and gunfire woke her.
"Someone shouted, and then hearing them shout, I heard I want to say two or three shots," the neighbor said.
The neighbor said the incident left her concerned.
"My first thought was because I heard the person shout, I thought if they were not caught, they would be trying to run into any of the houses so it made me a little nervous," she said.
Police said the man was taken to Lankenau Medical Center, where he died. The officer was transported to Mercy Fitzgerald Hospital and evaluated for minor injuries.
Law enforcement officers from across Delaware County responded to the scene following the shooting.
The Delaware County District Attorney's Office is handling the investigation.
The incident has left some residents shaken.
"To see stuff like this happen right in your backyard, it's really hard," said Lafayette Sirleaf of Darby.
The officer has been assigned to administrative duty while the investigation continues.