A 67-year-old was pronounced dead at the scene of the accident on the A7, a mile north of Stow.
She had been driving a Volkswagen Polo which overturned after being involved in a collision with an Audi A6 at 16:35 on Tuesday.
Police said a 95-year-old woman, who was one of two female passengers in the Audi, later died from her injuries at a hospital in Edinburgh.
A spokesman for the Scottish Fire and Rescue Service said a driver and a passenger were trapped in one of the cars when they arrived at the scene.
He said they were helped by a passing nurse, who administered oxygen to one of the casualties, before paramedics arrived and the injured people were removed from the vehicle.
Police said the male driver of the Audi and a second passenger in his car were taken to the Royal Infirmary in Edinburgh but they did not sustain life-threatening injures.
Police closed the road for six hours following the crash and have appealed for information from witnesses.
Sgt Brian Smith said: "Tragically, this incident has resulted in the death of two women and we are now working to establish exactly what happened.
"I would ask that any motorists who were on the A7 near Stow yesterday and have information that can assist with our investigation contacts police immediately."
Two woman have died following a head-on road crash in the Borders.