The skipper came out on top in a joint decision made by an expert panel and a public vote.
It’s the second month in a row that an LFC Women player has been victorious after midfielder Ceri Holland scooped the award for February.
Centre-back Fahey has been recognised for key influences on games at both ends of the pitch during March, with the Reds securing two wins and a draw in their three matches.
Fahey’s header brought her side a winning goal against Crystal Palace in a 1-0 away victory.
It was even better against Coventry United, with Fahey scoring twice and recording another clean sheet in the 5-0 win at Prenton Park.
The month ended with a draw against Blackburn Rovers, where the Reds conceded their only goal of the month.
Also nominated for the award were Natasha Flint (Leicester City), Ini Umotong (Lewes) and Hayley Crackle (Coventry United).