Police allege a 14-year-old unlicensed boy was driving an unregistered and uninsured Mitsubishi Lancer with three other teenagers when he lost control of the vehicle at 6.10pm on Thursday.
They said he veered into the southbound lane, swiping a small Suzuki Swift before colliding head-on with a Volkswagen Polo, which was then impacted from the rear by a Hyundai Kona.
There were lengthy delays as emergency services rushed to the scene on Maryborough-Hervey Bay Road, on Queensland's Fraser coast north of Brisbane.
Seven people are fighting for their lives, with several needing to be freed from their vehicles.
It was believed the Lancer was owned by a grandparent but was previously registered to the mother of one of the victims, police said.
"Obviously, they're both very traumatised as a result of what's happened and their daughter and granddaughter is seriously injured," Inspector Paul Algie said.
"We will talk to them at an appropriate time to ascertain exactly the circumstances under which this vehicle was taken yesterday afternoon."
He said speed was the most likely primary cause of the incident, but he also pointed to the driver's inexperience.
"We cannot avoid the fact that the driver of the vehicle was 14."
The incident happened on the third anniversary of a triple-fatal accident on the same road involving a child operating a stolen vehicle.
"That sent shock waves through this community that are still felt to this day," Insp Algie said.
"I have no doubt that as a result of this crash, they will be thinking about this again."
All four teenagers in the Mitsubishi sustained serious injuries including a 16-year-old girl and a 14 year-old boy who were airlifted to hospital.
The 14-year-old driver was transported to Hervey Bay Hospital in a stable condition.
The driver of the Suzuki, an 18-year-old woman, and a 58-year-old passenger were both airlifted to hospital in a critical condition.
The driver of the Volkswagen, a 40-year-old man, was trapped along with a 40-year-old woman and a two-year-old girl.
The woman was later airlifted to Brisbane while the driver and two-year-old were taken to Hervey Bay hospital with the child later discharged.
The sole occupant of the Kona, a 19-year-old male, was taken to hospital in a stable condition with limb injuries.
Drivers must be at least 17 years old to qualify for a provisional driver's license in Queensland.
Police have urged anyone with CCTV or dashcam footage to come forward.
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