。
She doesn't live there anymore.
Literal
[topic-は] no-longer there [at-に] is-residing-not.
住んでいる is the resulting state of 住む ('reside, live somewhere') — Japanese describes 'living somewhere' as an ongoing state, not a punctual action. 住む takes に for the residence (住んでいる場所 'the place where one lives'); で would imply doing something at the location, not being domiciled there. もう~ない gives 'no longer' — 'used to live there, but doesn't anymore.' The implicit backstory (someone has moved, retired, or otherwise vacated) makes this a common line in catching-up conversations.