Country singer Taylor Swift was second with $45 million with Katy Perry closely behind her on $44 million. Beyonce Knowles and Rihanna finished off the top five, earning $35 million and $29 million respectively.
Gaga's impressive earnings were mainly down to her 'Monster Ball' tour, which grossed $1.3 million a night as well as many endorsement deals, which include the likes of Polaroid, Virgin Mobile, Monster Cable and PlentyOfFish.com.
The earnings estimates were compiled with the help of data from Pollstar, RIAA and others, as well as extensive interviews with industry insiders including lawyers, managers, concert promoters, agents and, in some cases, the musicians themselves.
The totals encompass all pre-tax income earned from May 2010 to May 2011, before subtracting agent and manager fees.
Other stars in the top 10 include British star Adele - who has had worldwide success with her album '21' - Alicia Keys and Pink.
The Top 10 of Forbes.com's Top Earning Women in Music List:
1 - Lady Gaga
2 - Taylor Swift
3 - Katy Perry
4 - Beyonce Knowles
5 - Rihanna
6 - Pink
7 - Carrie Underwood
8 - Celine Dion
9 - Adele
10 = Alicia Keys
10 = Britney Spears