RCMP Sgt. Patrick Webb says all indications point to the package as the source of Friday's explosion at a townhouse complex in Innisfail, 120 kilometres north of Calgary.
Neighbours and members of the victim's church have identified the dead woman as Vicky Shachtay, a 23-year-old mother who had been left paralyzed by a car crash.
A second woman, Shachtay's aide, was also in the apartment at the time of the explosion but was not injured.
Shachtay's six-year-old daughter was reportedly in school at the time.
Webb says dozens of investigators, including explosives experts from Edmonton and Ottawa, are at the scene and will likely remain there for days.
"It is a tragedy and we're trying to determine exactly what happened," Webb said. "We're going all out on this one."
Webb said the package wasn't left by Canada Post or couriers, but was delivered by hand.
Police are warning people in the town to be wary of unexpected packages, particularly hand-delivered ones.
Investigators aren't releasing any other details about the package. The blast blew out a window at the townhouse and some debris went through it, but the damage was limited to just one suite.
The mystery has everyone in Innisfail on edge.
"You're afraid to let your dog or kids out because nobody knows what they might find in the alley. Even if you're driving, you might drive over a package," said Marci Bishop, the night manager of the bar at the Innisfail Hotel.
Bishop said the blast happened less than two blocks away from the hotel, and she said investigators have questioned staff if they'd noticed anything suspicious. They're also planning to look at the bar's surveillance tapes, she said.
"We've never had anything like it," she said.
Webb said investigators are still figuring out the motive for the attack, or whether the woman who died was even the intended victim.
RCMP Cpl. Warren Wright said Friday that the woman did not have a history with local police.