The collision happened yesterday on the A90 at Blackdog, a hamlet north of Aberdeen, last night.
The woman, travelling in a red BMW X1 Estate, sustained serious injuries from which she later died. Her daughter and two grand-daughters, aged eight and five years, were also injured.
Three men, aged between 22 and 23, were in the other vehicle, a Black Honda Civic. One had injuries which it was said may be life-threatening. The two others suffered femural damage.
Two people were trapped in their cars and freed by Grampian Fire and Rescue Service. The injured were taken by ambulance to Aberdeen Royal Infirmary.
The accident took place at around 3pm and the road was closed until late last night.
Diversions were put in place as police launched an investigation into the circumstances of the crash.
The victims have not been named.
Local Scottish National Party Councillor Cryle Shand said the incident was "most regrettable" and he was "deeply disheartened" to hear of the tragedy.
The A90 is notorious for road collisions, with a flyover in the south between Brechin and Stonehaven having been in discussion for the past eight years to bypass another accident blackspot.
The 20-mile stretch has seen 15 serious crashes and four fatal accidents between 1999 and 2010.
Another tragedy struck Aberdeenshire when 18-year-old Zoe Dunn died in a car accident in May.
The Aboyne Academy pupil was killed in a crash when her Renault Clio came off the road and hit a tree on the South Deeside Road.
Paramedics rushed to the scene but were unable to save the teenager.
Her parents Stephen and Debbie and brother Daniel spoke of her ambition to become a nurse and her love for her friends and boyfriend.
In a statement, the family paid tribute to a "precious, cherished daughter and supportive, loving sister". They said: "An immense sadness is overwhelming the family at this time.
"Zoe had everything to live for and had planned and successfully been accepted to begin college in September to follow her dream to become a nurse.
"A hard-working young girl, she prepared for her role as a nurse by working at Allachburn Care Home.
"She enjoyed her time working at the After School Club.
"Zoe had a love for life and shared her time with lots of friends and her long-standing boyfriend Scott Inglis, who she loved dearly. Zoe grew up with a love for animals, especially her dog, Maya, and caring for the horses, Cassie and Pixie.
"The family would like to extend their thanks for all the comfort and support they have received."
In April, there were also a spate of crashes in the area, including a seven-car pile-up, due to snow and foul weather conditions.
Contextual targeting label: