The fire started in a third-floor apartment at the Somerville Senior Citizens Housing complex on Mountain Avenue around 10 p.m.
The flames didn't spread beyond that apartment, but officials say the nine-story building has significant water damage from the sprinkler system.
That caused problems for the power and prompted a full evacuation.
The tenant of the room where the fire started, 77--year-old Loretta J. Litchman, was discovered lying unresponsive on the living room floor. Somerset Medical Center medics pronounced her deceased on the scene.
The cause of death will be determined pending the results of an autopsy to be conducted by the New Jersey Regional Medical Examiner's Office.
An investigation conducted by the Somerset County Prosecutor's Office Arson Task Force, Somerville Police and the Somerville Fire Marshall has determined that the fire appears to be accidental and a result of the victim smoking a cigarette while using oxygen.
The fire was contained to the apartment 309 and there were no injuries reported to first responders.
The Finderne and Raritan Fire departments also responded to assist.
The Red Cross is working with several residents to make sure they have somewhere to stay until the building is safe to re-enter.