The man, brandishing a sawn-off shotgun and a knife, tied up and killed the woman who worked at the home in the village of Montferrier-sur-Lez near the city of Montpellier, a prosecutor said.
More than 70 men and women, most of whom served as missionaries in Africa, live at the home.
Armed police searched the building but believe the man fled, sources close to the police operation said, and a large-scale police operation was under way to find the unidentified attacker.
Investigators so far had no evidence to suggest the attack was terror-related at a time when France remains under a state of emergency after a number of Islamist atrocities, including the murder of an elderly Catholic priest in July.
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"For the time being, there is only one victim," Montpellier prosecutor Christophe Barret told AFP. "For the moment there is no particular evidence about the motive for this crime."
"Nothing is pointing towards the motive" of the killer, he added.
The man was not known to authorities.
Many of the residents require assistance to walk, he said.
The secretary general of the French Bishops' Conference, Olivier Ribadeau Dumas, said in a Twitter message: "Our prayers tonight go to the woman who lost her life in this attack on a retirement home."
Around two hours after the attacker burst into the home, more than a dozen police and emergency vehicles lined the roads near the home while police set up roadblocks to check vehicles passing through the area.
France is under a state of emergency that gives security forces enhanced powers of surveillance and arrest.
Islamist extremists have carried out three large-scale attacks in France since January 2015, when gunmen targeted the Charlie Hebdo satirical magazine and a Jewish supermarket.
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