Apex police say EMS arrived at the home and daycare center after another child's parent called 911.
"They walked in to leave their child there for daycare and was almost immediately met by the daycare operator who says call 911," Apex Police Chief Jack Lewis said.
Daycare owner Judy Lucas was licensed to watch five kids, but investigators say she was watching eight children at the time of death.
Police say the infant had an older sibling at the daycare, who along with other kids didn't appear to have any medical problems.
Lucas has not been charged with any crime, but the North Carolina Department of Health and Human Services has shut down her business. It said it found more than a dozen violations of North Carolina daycare regulations. In addition to having too many kids in her care, investigators found safety and paperwork problems.
Warrants show officers confiscated bedding and various other items verifying Lucas' daycare credentials.
The Apex Police Department said it is awaiting a final report from the medical examiner's office for an official cause of death before concluding its investigation.
"Very devastating," Neighbor Shelley Peptis said. "She's watched children for 17 years and loves children and that's her life."
Peptis says Judy Lucas used to babysit her when she was as young as 3-years-old.
"And she's watched my children," Peptis said. "I have an 11-year-old, a 9-year-old and a 2-year-old, so she's a great lady."
Even though the Department of Child Development has since suspended Lucas' daycare license, Peptis says she'd still let her babysit for her.