Police are investigating the fatal head-on collision which happened at around 3.13am on Tuesday.
It involved a white VW Crafter van that was heading in the direction of York and a white Ford Focus saloon and that travelling towards Harrogate.
The driver of the Focus, a woman aged in her 60s from York, was pronounced dead at the scene by paramedics.
The front-seat passenger in the Focus, a 71-year-old woman from York, was taken by ambulance to Leeds General Infirmary with serious injuries that are not believed to be life-threatening.
The driver of the VW van, a 38-year-old man from Halifax, has been arrested on suspicion of causing death and serious injury by dangerous driving.
He remains in custody for questioning.
Diversions were managed by the Highways Agency while the emergency services worked at the collision scene and to allow the vehicles to be safely recovered.
The road re-opened at around 8.30am.
Witnesses to the collision or anyone who recalls seeing either the white VW van or the white Ford Focus prior to the incident, are urged to contact North Yorkshire Police on 101, select option 2, and ask for Hamish Halloway.
Or email [email protected] quoting reference number 12180188425.