Sistergirl is a term used by Aboriginal and Torres Strait Islander people to describe gender-diverse people that have a female spirit and take on female roles in the community.
Crystal Love, the matriarch of Tiwi sistergirls, said she had lost part of herself when her daughter was killed on Monday.
The victim's name is not being used for cultural reasons.
"We are living in a world that is all messed up ... she was good person, a kind person," Aunty Crystal said.
"She had a good life, she had family and friends who love her, our communities that love her, but it was just tragic, because ... sometimes some people have bigger dreams, she had those."
Witnesses are helping police with the investigation, which is being treated as domestic violence. ((A)manda Parkinson/AAP PHOTOS)
Members of the Tiwi sistergirl community refer to Aunty Crystal as mother, as she has advocated to bring both culture and western worlds together for Indigenous transgender communities.
Northern Territory Police said they were called to a unit complex in Darwin's northern suburb of Malak about 9:35pm where officers found the victim unconscious in the backyard, with a stab wound in her chest.
Senior Sergeant John Beer said witnesses were helping police with the investigation, which was being treated as a domestic violence-related death.
"I know there were a number of people at the location and we're obviously conducting inquiries in relation to who was actually there," he said.
Police are gathering evidence at the unit complex where the victim died. ((A)manda Parkinson/AAP PHOTOS)
Officers performed CPR but the 37-year-old was declared dead after paramedics arrived.
Police say a 34-year-old man, believed to be related to the victim, was arrested at the scene and is expected to be charged later on Tuesday.
It's the second fatal stabbing in Malak in recent months, following the alleged domestic violence death of a woman on August 21.
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