The 18-year-old driver of the silver Peugeot 306 was declared dead at the scene, while a 19-year-old passenger later died in hospital.
Four teenage boys who were in a silver Opel Astra traveling behind the Peugeot were arrested on suspicion of causing death by dangerous driving following the crash in Horsham, West Sussex.
The force of the crash caused the engine of the Peugeot to be captapulted from the car and into the middle of the road.
The A264 Five Oaks Road near Fulfords Hill in Slinfold was closed for nine hours as rescuers attended the horror smash.
Two other passengers - an 18-year-old man and a 17-year-old girl - were taken to the Royal Sussex County Hospital with serious, but not life-threatening injuries.
The man was said to have serious but non-life-threatening injuries while the girl's injuries were described as minor.
Sergeant Alan Spicer, from the Roads Policing Unit at Sussex Police, said: 'All fatal road traffic collisions are tragic but even more so when it involves young people just starting out in life.
'I would appeal to anyone who witnessed the collision and has not yet spoken to officers to please do so as a matter of urgency.
'We would also like to hear from any other drivers who saw the silver Peugeot or the silver Opel Astra prior to the collision.'
The road was closed to traffic for nine hours while crash investigators attended the scene.
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