The encounter took place between the state's elite Special Operation Group (SOG) and members of the KKBN (Kalahandi-Kandhamal-Boudh-Nayagarh) division of the outlawed outfit in Milicia reserve forest near Barkhama under Baliguda police station area, about 95 km from here last evening.
Kandhamal SP Mitrabhanu Mohapatra said the Maoists opened indiscriminate fire and the SOG jawans retaliated.
One woman Maoist was killed, Mohapatra said. She was yet to be identified.
The SP said her body has been brought to the district headquarter hospital for autopsy.
Blood stains were found in some places of the encounter site and a pistol, explosives, utensils and medicines were seized from the spot.
Combing operation is underway in the areas, Mohapatra said.