According to the lodging house deputy Tim Donovan and the watchman John Evans, at about 1:45 a.m. on the morning of her death, Chapman found herself without money for her lodging and went out to earn some on the street. At the inquest one of the witnesses, Mrs. Elizabeth Long testified that she had seen Chapman talking to a man at about 5:30 a.m. just beyond the back yard of 29 Hanbury Street, Spitalfields. Mrs. Long described him as over forty, and a little taller than Chapman, of dark complexion, and of foreign, "shabby-genteel" appearance. He was wearing a deer-stalker hat and dark overcoat. If correct in her identification of Chapman, it is likely that Long was the last person to see Chapman alive besides her murderer. Chapman's body was discovered at just before 6:00 a.m. on the morning of 8 September 1888 by a resident of number 29, market porter John Davis. She was lying on the ground near a doorway in the back yard. John Richardson, the son of a resident of the house, had been in the back yard shortly before 5 a.m. to trim a loose piece of leather from his boot, and carpenter Albert Cadosch had entered the neighbouring yard at 27 Hanbury Street at about 5:30 a.m., and heard voices in the yard followed by the sound of something falling against the fence.
Two pills, which she had for a lung condition, part of a torn envelope, a piece of muslin, and a comb were recovered from the yard. Brass rings that Chapman had been wearing earlier were not recovered, either because she had pawned them or because they had been stolen. All the pawnbrokers in the area were searched for the rings without success. The envelope bore the crest of the Sussex regiment, and was briefly thought to be related to Stanley who pretended to be an army pensioner, but the clue was eliminated from the inquiry after it was later traced to Crossingham's lodging house, where Chapman had taken up the envelope for re-use as a container for her pills. The press claimed that two farthings were found in the yard, but they are not mentioned in the surviving police records. The local inspector of the Metropolitan Police Service, Edmund Reid of H Division Whitechapel, was reported as mentioning them at an inquest in 1889, and the acting Commissioner of the City Police, Major Henry Smith, mentioned them in his memoirs. Smith's memoirs, however, are unreliable and embellished for dramatic effect, and were written more than twenty years after the event. He claimed that medical students polished farthings so they could be passed off as sovereigns to unsuspecting prostitutes, and so the presence of the farthings suggested the culprit was a medical student, but the price of a prostitute in the East End was likely to be a lot less than a sovereign.
The first officer on the scene was inspector Joseph Luniss Chandler of H Division, but Chief Inspector Donald Swanson of Scotland Yard was placed in overall command on 15 September. The murder was quickly linked to similar murders in the district, particularly to that of Mary Ann Nichols a week previously. Nichols had also suffered a slash to the throat and abdominal wounds, and a blade of similar size and design had been used. Swanson reported that an "immediate and searching enquiry was made at all common lodging houses to ascertain if anyone had entered that morning with blood on his hands or clothes, or under any suspicious circumstances". The body was conveyed later that day to Whitechapel mortuary in the same police ambulance, which was a handcart just large enough for one coffin, used for Nichols by Sergeant Edward Badham. Badham was the first to testify at the subsequent inquest.