The victim was walking towards the Waterside on Tuesday night, at about 8.25pm, when she was approached from behind by a man armed with a knife.
He made off with her handbag and ran towards Foyle Street, where he is believed to have got into a taxi which dropped him off at Great James Street.
The woman was uninjured, but left badly shaken by her ordeal.
The armed robber is believed to have been wearing a blue tracksuit top at the time of the incident.
Detectives at Strand Road are appealing for information, particularly from anyone who saw a man acting suspiciously in the area.