Scotland Yard detectives believe the 61-year-old woman was wounded in the suspect’s first-floor flat in Papworth Gardens, Holloway, where she was working.
Police were called to the property in north London on Thursday morning after a neighbour heard a scream at about 4am.
The woman, who is understood to have been employed by a care agency commissioned by Islington Council, was taken to hospital but died at about 11am on Friday.
The 95-year-old suspect, who has not been named, has been granted bail – with the Metropolitan Police saying he will remain in hospital until he is moved to a place where “his complex health and care needs can be managed”.
Neighbours have described him as a frail man who uses a walking stick.
Max Wurr, a spokesman for the woman’s employer, said: “We were devastated that a member of our care team in Islington has died in hospital after paramedics were called to the home of one of our customers.
“The cause of death has not yet been confirmed to us and we are assisting the police whilst their investigations are ongoing.
“Our thoughts are with the care worker’s family and friends as they deal with this tragic news.”
A woman who has been living in the 95-year-old’s block of flats for 10 years said he was rarely seen outside his home since he and his wife fell ill.
The woman, who did not want to be named, said the elderly man would normally have a carer looking after him and he was occasionally visited by family members.
“It’s a surprise. They are a very good family,” she said.
“I don’t know what’s happened. I was coming home from work and saw police upstairs.
“Another neighbour heard a scream at about 4am, but I didn’t.”
The woman’s family has been informed and a post-mortem examination is set to take place.
Officers are not seeking any other suspects in connection with the case.