The suspect, identified as 30-year-old Alton Nolen, attacked another colleague with the knife before being shot by the Oklahoma food distribution firm's boss - who was hailed a hero by police.
Nolen, who survived and was in hospital in a stable condition, appeared to have chosen his victims at random, police said of Thursday's grisly incident, and there was no immediate indication of a link with terrorism.
"Nolen went to the parking lot, then drove his vehicle to the front of the business... he then entered the main entrance," said police spokesman Jeremy Lewis in the city of Moore.
"Nolen encountered and killed Colleen Hufford with a knife. During the attack, Nolen severed the victim's head," he said in a statement.
The second, wounded colleague was rushed to hospital and was in a stable condition.
"After conducting interviews with Nolen's co-workers, information was obtained that he recently started trying to convert several employees to the Muslim religion," the spokesman said.
Because of the nature of the crime local police called in the Federal Bureau of Investigations (FBI), he added.
Officials say that so far found no links to terrorism have been uncovered in the investigation.

Alton Alexander Nolen, the man who allegedly beheaded a woman on 25 September 2014 at Vaughn Foods distribution plant in Moore, Oklahoma (AAP)
It comes after a series of beheadings of Western captives by jihadists in the Middle East and Algeria, but US officials have not confirmed any link to the Oklahoma case.
"We can hear a lot of screaming," a 911 caller, who said he was in a separate building, reported to police during the attack, according to a recording released by Moore police.
"We have someone attacking someone in the building...We know that he’s loose. He has stabbed someone." At that point during the call gunshots can be heard in the background.
"It did appear random. He wasn't targeting anyone. It appears they were just in his way as he came in," Lewis told a press conference, adding that the chief operating officer who shot Nolen was a "hero."
"This was not going to stop if he didn't stop it. He is obviously a hero in this situation. It's very tragic that someone did lose their life but this could have gotten a lot worse," he said.
"This guy was definitely not going to stop, he didn't stop until he was shot. We would have had a lot more victims."
The food company voiced shock at the attack.
"Our thoughts and prayers go out to the families and friends of the team member we lost and all those affected," Vaughan Foods said in a statement.
"Our focus is on the safety and wellbeing of our employees. We will provide counseling and support for our team members and support each other through this difficult time."
According to the Oklahoma Department of Corrections, Nolen has a criminal record dating back to 2006, including drug-related arrests, a jail escape and resisting police.
He was imprisoned from April 2011 to March 2013 and is currently listed as being on probation.
The Department of Corrections describes Nolen as having several tattoos, including a picture of Jesus Christ on his chest, praying hands on his arm and an inscription on his abdomen that says, "As-Salaamu Ataikum," an Arabic greeting often used by Muslims translating to, "Peace be upon you."
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