Detective Lisa Watt, of Queenstown, said low cloud and difficult weather conditions prevented the couple, a man and a woman, being airlifted to Dunedin for treatment and they were to remain at Queenstown Lakes District hospital overnight.
"The passengers in the red car [Cruze] suffered serious injuries to their legs, chest and head,"Det Watt said at the scene of the accident.
St John Wakatipu team leader Colin McGee said the couple were transported to hospital in separate ambulances after St John received the call-out at 4.35pm.
Two males in their mid 20s travelling in the Pajero received minor injuries and were taken to Lakes District Hospital in a third ambulance for assessment, Mr McGee said.
Det Watt said the driver of the Pajero had hit his head on the windscreen when the two vehicles collided.
She said police were still piecing together what happened on the sloping section of road near Fernhill, in Queenstown.
Both vehicles had impact damage on the front passenger corners.
Police blocked off the section of the Queenstown to Glenorchy road, diverting traffic through Fernhill, after the accident.
It appeared the Holden was travelling west to Glenorchy and the Pajero was travelling towards Queenstown, Det Watt said.
She was unable to say where the elderly couple were from but said the two men in the Pajero were from Queenstown.
Police were expected to be at the scene for several hours last night.
