The collision occurred at around 7 a.m. near the intersection of Carlton and Parliament streets, said Toronto police. The pair, a 46-year-old woman, and a 59-year-old man were rushed to hospital.
The woman has sustained life-threatening injuries, police said. The man has suffered minor injuries.
The tow truck driver was travelling eastbound on Carlton when it turned north on Parliament, police said. The pedestrians were struck as they crossed from the east side of Parliament Street to the west side while on a pedestrian crosswalk.
The driver, 36, stayed on the scene and is co-operating with police.
Police say the two pedestrians struck did not know each other.
Police are investigating what led him to drive onto the pedestrian crosswalk. It's not yet known if charges will be laid.