The advertisement by Ann Marie Linscott, 49, was posted in November as a generic request for somebody to perform a "freelance" job, court documents said.
Her true intention was only communicated to those who emailed her seeking additional information about the job, the Craigslist CEO said.
Linscott offered $5000 for the hit, had the name and work address of the woman she wanted dead and she described successful candidates as "silent assassins", according to agents and court documents.
"I've seen some screwy things, but I've personally never heard of anything like this," said Drew Parenti, special agent in charge of the Sacramento FBI office. "For a person to advertise openly for a hit man on Craigslist."
Agents arrested Linscott, whom they say went by the name of Ann Marie and used the simple alias "Marie", at her home in Grand Rapids, Michigan, on Thursday.
Federal prosecutors will ask a judge on Tuesday to make her stand trial in Northern California, where Butte County authorities worked with the FBI to identify the victim and her husband.
A call to Linscott's court-appointed public defender was not immediately returned on Saturday.
Linscott is accused of asking people who responded to her ad to "eradicate a female living in Oroville, California", and she provided additional information on the intended victim, including her physical description, age and employment address.
On two separate occasions following the November ad posting, she offered payment of $5000 upon completion of "the eradication task", according to court documents.
"Out of 550 million classified ads posted over 12 years, this is the first such incident that we're aware of," Craigslist CEO Jim Buckmaster said.
"But again, the ad itself was generic, and we're not a party to subsequent private email communications."
Buckmaster said the arrest demonstrated the vigilance of Craigslist users, who are urged to report fraud and scams on the site to keep it clean.
It's not the first alleged crime ever solicited over the popular online bulletin board. There have been instances of ads posted by prostitutes and a Minnesota woman was killed last year after responding to an ad for a baby sitter.
However, authorities and company officials say the murder-for-hire scheme appears to be the first of its kind.
The intended victim and her husband have not been identified, but Parenti said the man acknowledged meeting Linscott through an online college course more than two years ago.
Parenti said the two forged an intimate relationship online and met at a hotel room for two days in Reno, Nevada, in 2005.
Linscott had also met him near the couple's home, about 112 kilometres north of the state capital, last spring. They continued to communicate by phone and email.
AP