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Emergency services were called to a house on Hilltop Road in Avalon Beach about 1am on Friday following reports of a fire.
Firefighters and police arrived at the scene to find the home completely alight.
It took firefighters one hour to control the fire.
After the blaze was extinguished, police and fire crews worked to find the occupant, a 71-year-old woman.
Human remains were located at the home following an “extensive search” yesterday, police said.
The remains are yet to be formally identified however police believe they belong to the missing woman.
A crime scene has been established at the home and inquiries into the fire are ongoing.
Emergency services continued searching the home today.
A report will be prepared for the Coroner.