The crash happened about 4pm when the driver of a southbound car, which was towing a trailer carrying a racing car, lost control and crossed the centre line, colliding with a northbound vehicle.
Milton's chief fire officer Alan Tapp said he believed the crash was caused by a large bump that appeared during the construction of a new passing lane.
[comment caption=Have you noticed the bump on SH1?]Mr Tapp told the Southland Times it appeared the vehicle travelling south hit the bump before veering over the centre-line.
The 43-year-old female driver of the southbound car, and the 59-year-old male driver of the northbound car, were trapped in their vehicles for about 20 minutes.
They suffered moderate to serious injuries and were airlifted to Dunedin Hospital.
A 47-year-old male passenger in the southbound car suffered moderate shoulder injuries and was also transported to hospital.