Police said they were notified about 10 p.m. of the girl's death.
Authorities say the girl had wandered away from her home with her dog and was found in a creek.
Paramedics worked to save the 3-year-old who was pulled from the water behind a ranch-style home in the 9700 block of Rougemont Road in northern Durham County.
A neighbor told ABC11 that the creek has slippery sides and it would be difficult for a child to climb out. Recent rain has only increased the erosion.
WATCH: Neighbors say creek had slippery slopes
Off-camera, a neighbor said the family had recently moved to the area.
First responders drove the girl in a golf cart up the hill before loading her into an ambulance.
She was taken to Duke University Hospital.
On Tuesday, Tommy Murrah, who lives near the scene of Monday's incident, said the area is usually very peaceful.
"It's extremely quiet, reserved, laidback, Fairly secluded," Murrah said.
While Murrah does not know the family involved, the incident brought up a tragic memory.
"My nephew about five years ago, his 2-year-old son drowned in a hot tub. So it already hit home to me," Murrah said.
That tragedy weighing on his mind, as he noted another young family member also lives near the creek involved in Monday's incident.
"It makes you really hurt for the people who were involved, and the family involved with that," said Murrah.
On Tuesday, investigators were on the property. They would not specify what they were looking for.
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Durham County deputies executed a search warrant on the little girl's home. Evidence recovered at the scene is being analyzed, the sheriff's office said.
The girl was found after deputies responded to the home around 1 p.m. for a report of a missing person.
It's unclear how long the toddler was in the water.
Late Tuesday evening, Durham Police said investigators were still speaking with the family and examining evidence that was recovered at the scene.
The case remains under investigation. No charges have been filed.