Caceres, a Lenca Indian activist, had previously complained of receiving death threats from police, soldiers and local landowners because of her work.
Tomas Membreno, a member of her group, the Indian Council of People's Organizations of Honduras, group said at least two assailants broke into a home and shot Caceres to death today in the town of La Esperanza.
"Honduras has lost a brave and committed social activist," Membreno said in a statement.
Caceres, a mother of four, led opposition to a proposed dam on the Gualcarque river, considered sacred by the Lencas. Many of the project's backers have largely abandoned building plans.
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"The president has instructed all government security forces to use all means to find the killers," Alcerro said.
Alcerro said Caceres was supposed to be receiving special protection because of the death threats, but did not explain why there were no police protecting her when she was killed.
The United Nations special rapporteur on the rights of indigenous peoples, Victoria Tauli-Corpuz, wrote that "it is highly probable that her assassination is linked with her work in protecting the human rights of the Lenca indigenous peoples to their lands and territories."
The website of the Goldman Environmental Prize said Caceres "waged a grassroots campaign that successfully pressured the world's largest dam builder to pull out of the Agua Zarca Dam," which the site said "would cut off the supply of water, food and medicine for hundreds of Lenca people and violate their right to sustainably manage and live off their land."
Erika Guevara-Rosas, Americas Director for Amnesty International, said in a statement that "the cowardly killing of Berta is a tragedy that was waiting to happen."
"For years, she had been the victim of a sustained campaign of harassment and threats to stop her from defending the rights of indigenous communities," said Guevara-Rosas.