Lisa Oliver, 31, and her youngest daughter, Katherine Thomas, 8, died in their Moravia Street home when it caught fire early Friday.
Firefighters found Oliver and Thomas in a second-floor room.
A second 11-year-old daughter escaped the fire that was reported about 1:45 a.m.
Next door neighbor Steven Jurina ran over to the house when he saw the flames and began pounding on the door to see if anyone was inside.
"Then I heard a little girl's voice behind the house," said Jurina. "I hurried up and ran behind the house, and the little girl was running like away from me."
The little girl told him that her mom and sister were still in the house. So he ran and kicked in the front door.
"Smoke came out like real heavy at first, and then it calmed down a little bit," he said. "I tried to proceed into the house, and each time I tried to proceed, I was only able to make it 5, 6 feet."
Herbert Thomas, Katherine's father, said family members told him Oliver did all she could to save her daughters. He was working the overnight shift at Jameson Hospital in nearby New Castle when the fire was reported.
"She jumped out the window with the oldest child, jumped out the window and went back inside to get my daughter and didn't make it out," he said.
The 11-year-old is in the hospital being treated for burns.
The State Fire Marshal is investigating to find out what caused the fire.
The Associated Press contributed to this report.
