The incident occurred at around 9.20pm on Saturday night (October 3) on Bloxham Road in Banbury.
Close to the junction of Springfield Avenue, there was a collision between a white Mercedes and a white Volkswagen Polo.
An 18-year-old woman who was driving the white Volkswagen Polo was taken to hospital but has now died, say Thames Valley Police.
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The woman’s next of kin have been informed and are being offered support by specially trained officers.
Three people from Banbury have been arrested in connection with the incident, and all three remain in police custody at this time.
A 36-year-old man was arrested on suspicion of driving whilst disqualified, causing death by dangerous driving, and driving while over both the specified drug and alcohol limits.
A 24-year-old man was arrested on suspicion of causing death by dangerous driving and failing to stop when required.
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A 33-year-old woman was arrested on suspicion of driving while unfit through drugs and causing death by dangerous driving.
Thames Valley Police is now appealing for witnesses and footage following the fatal road traffic collision in Banbury.
Investigating officer Detective Sergeant Lyndsey Blackaby of the Serious Collision Investigation Unit said: “Firstly, our thoughts remain with the young woman’s family and friends at this devastating time.
“We are working hard to establish exactly what happened and would urge anyone who witnessed the collision, or has relevant footage, to come forward as a matter of urgency.
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“A number of people were at the scene, and if you have not yet spoken to us, please get in touch.
“I also ask any drivers who were in the area at the time and have dashcam footage to review it, as it may contain important information about the collision or the moments leading up to it.”
Contact Thames Valley Police by calling 101 or by submitting a report via our website, quoting reference number 43260517700.
If you have information and would like to remain anonymous, you can share what you know with Crimestoppers by calling 0800 555 111 or via its website.