The death is the second confirmed from avian influenza in less than a week in Indonesia, the world's fourth most populous nation. A 29-year-old woman also died of the virus at the weekend on the resort island of Bali.
The latest victim, identified only as Lu, died on Tuesday in Tangerang, a satellite city west of the capital, Jakarta, a day after being admitted to hospital, the health ministry said in a statement.
"The woman started to get sick on August 8, but it was not known whether she had any contact with sick poultry," an official from the bird flu information centre told AFP.
Health ministry investigators were in the neighbourhood where the woman lived and worked as a housemaid to determine where she could have been exposed to the virus, he said.
H5N1 is usually transmitted from birds to humans directly, though several cases of human-to-human transmission are believed to have occurred.
Indonesia has now reported 104 confirmed bird flu cases, with 83 deaths.
The H5N1 virus has become endemic across nearly all of the archipelago nation since it reported its first case in July 2005.
The first reported death on the resort island of Bali this week triggered fears of a detrimental impact on its crucial tourism industry, which is slowly recovering after Islamic extremist bombings in 2002 and 2005.
The 29-year-old woman was confirmed as dying from the virus, while her five-year-old daughter who died early this month was assumed to have also been infected with it, a health official said.
The infant was cremated before samples could be taken for testing to detect H5N1.
Officials meeting on the island Thursday meanwhile said that nearly 6,000 birds in the affected Jembrana district on the northwest of the island -- far from major tourist centres -- had been culled as a precautionary measure.
"Culling and (disinfectant) spraying will continue in all 52 villages in the district," I Gusti Ngurah Sanjaya, the district head of agriculture, forestry and marine resources, told AFP.
He said poultry was banned from being transported into or out of the district for one month.
"After that we will evaluate and strictly examine any birds that enter the village," he said.
The bird flu virus is regarded as a global threat because scientists fear it could mutate into a form that is easily spread among humans, leading to a pandemic with the potential to kill millions.