She was found on the top floor of the 194th Street home just before 10:30 a.m.
Firefighters detected carbon monoxide upon their arrival.
"They had a meter to test each floor for carbon monoxide and each floor showed carbon monoxide," said displaced resident Ryan Mohan.
In fact, the FDNY says its carbon monoxide detector was wailing as firefighters went through the home and located the woman.
"She collapsed and her daughter collapsed," Mohan said.
The woman was taken to a hyperbaric chamber at Nassau University Medical Center in critical condition.
Three additional people required medical attention, including Mohan's wife and young son. They were treated for exposure to carbon monoxide and are expected to be OK.
A neighbor who asked not to be identified had noticed all the people in the home, thinking the landlord had probably divided it into maybe four apartments, which was dangerous enough.
"We saw all these different people living there, even in the garage," said a neighbor. "There's an apartment there. So, we were worried about it because with so many people here, and if there is a fire or something, it could be deadly."
Investigators preliminarily found a three-story home that appears to have been illegally renovated.
They discovered seven apartments -- two in the basement, two in the first floor, two in the second floor -- and one on the attic floor where the woman was found.
The city's Buildings Department has responded to investigate. They have issued two violations so far: one for being over occupancy, and the other for illegal, unlicensed work used to subdivide the home. It says the tenants didn't have adequate egress, so they couldn't get out safely if there were a fire.
Investigators are preliminarily looking at the hot water heater as a possible source of the leak.
They say the boiler had a venting system that wasn't properly connected. That meant deadly carbon monoxide wasn't getting vented outside, but instead was being vented inside, putting the tenants in danger.
To make matters worse, there were smoke detectors but no carbon monoxide detectors to warn residents about the dangerous buildup created on Tuesday as that boiler was cranking in the cold weather.
The FDNY reminded New Yorkers that any appliance or tool that isn't correctly ventilated or maintained can be a source of carbon monoxide. They say to always use a carbon monoxide alarm and use a licensed plumber when work is needed.
As for the tenants, they are allowed to get their things but have to stay elsewhere on Tuesday night. The Red Cross is assisting the residents in finding another place to stay on Christmas Eve.
"I feel sorry for the tenants because now it's a holiday, and, you know, now they have to find homes to, you know, to be. It's a mess," the neighbor said.
Long term, it's unclear if the tenants will be allowed to stay here again until the building is up to code.
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