Police say a 17-year-old girl made up a story about being gang-raped after leaving a party at Baulkham Hills in Sydney's north-west last month.

The girl had claimed that she was dragged into a car with five men, sexually assaulted and then released.

But police say after extensive inquiries, they have determined that the girl's report was fabricated.

Commander of the Sex Crime Squad, Detective Superintendent John Kerlatec, says the allegation sent fear and anxiety through the Hills District.

"Frustrating on one account yet I must say I'm extremely relieved it didn't occur, extremely relieved, relieved for what could have been a legitimate victim and relieved for the fact I can tell many parents and young people in the Hills District that it is safe to walk around there," he said.

"Yesterday afternoon I was still receiving calls from concerned parents so I'm pleased in one regard that I can allay those fears that there aren't these people preying on young people in the Hills district, that this investigation is complete, that the allegation was fabricated."

At the time, the girl said she had been at a house party at Baulkham Hills and was walking along Merindah Road about 1:00am when a car stopped beside her.

She said five men inside asked her for directions to nearby shops.

She said she gave the directions, but as she turned away was grabbed from behind and dragged into the car.

She said she was driven to another location where she was sexually assaulted before being dumped on a residential street in Castle Hill.

She was treated in hospital after the alleged attack.

Police say they are now working with the girl and her family as they try to understand why she made the false report.

Police say they are yet to determine if they will lay charges against the girl.