Police say Kristhie Alcazar, 26, of Penns Grove, was arrested and charged with murder after police responded to an open 911 call with audible disturbance in the background.
Investigators say once they arrived at the home on Helms Cove Lane, they found Alcazar arguing with another person and the child's body with visible stab wounds to the chest.
Multiple knives were also recovered from the scene, officials say.
"It happened in my community. It happened right next to my house," said neighbor Arthur Edge.
On Saturday, a candle and stuffed animal were on the front porch where the fatal stabbing happened.
Edge said he is stunned.
"I lived next to her for two and a half years, so it's a shock to me," said Edge.
The infant's cause of death has been determined to be a homicide as a result of multiple stab wounds to the chest area.
No other injuries were reported.
Officials say the father of the infant was not at the residence at the time of the stabbing.
Anyone with additional information is asked to contact the Salem County Prosecutor's Office at (856) 935-7510 or the Penns Grove Police Department at (856) 299-0056.