The men fired indiscriminately at Javed and her father Mohammad Javed while she was leaving a beauty parlour at the busy Mohallah Nau in Dabgari Bazar on Mondauy night, the singer's relatives told police.
The singer's younger sister, Farhat Bibi, escaped unhurt. The attackers, who were riding motorcycles, escaped after the shooting.
Police officials told the media that they were ascertaining details of the attack to establish who was behind the crime. They said the singer's relatives had not asked police to file charges against anyone as yet.
In recent years, several singers and musicians in Khyber-Pakhtunkhwa province have been gunned down by the local Taliban, who have declared music "un-Islamic".
Several musicians have fled the northwest after receiving threats from the militants.
Police are also looking at the possibility that Javed's death was linked to differences with her husband.
Javed married Jehangir Khan, a native of Peshawar, some two years ago.
Last year, differences emerged between the couple and she left her husband's home and began living with her father.
Javed, who belonged to the erstwhile Taliban stronghold of Swat Valley, had filed a suit for the dissolution of her marriage, media reports said.
The singer rose to prominence after performing on state- run PTV and her audio and video albums were popular both in Khyber-Pakhtunkhwa and among Pashto people living in the Middle East.
Image: Ghazala Javed