。
She is reading a book in the library.
Literal
She [topic-は] library [at-で] book [object-を] is-reading.
A straightforward example of ~ている marking an ongoing action — she's in the middle of reading right now. The particle で marks the library as the location where the activity takes place, specifically the 'setting of an action' use of で, as opposed to に which would mark a static location of existence.