RCMP say three plain-clothes officers were trying to stop the 2008 Toyota Corolla at an intersection in Fort McMurray on Saturday afternoon.
They say there were three youths in the vehicle at the time, and that the shots were fired when the vehicle was trying to escape.
RCMP say one shot struck the 16-year-old, who they say was the driver.
Police say the boy suffered serious injuries and was flown to a hospital in Edmonton.
Sgt. Patrick Webb said at least two police vehicles had boxed in the Corolla at the intersection, but the driver tried to smash his way out.
"He basically rammed those vehicles with his own," Webb said on Sunday.
Webb said the last report he'd received was that the teen was in stable condition.
The two remaining youths in the vehicle weren't hurt, but police say two of the officers suffered minor injuries.
The two youths were arrested but have since been released.
The Alberta Serious Incident Response Team, a provincial body that investigates police incidents, is taking over the shooting investigation.
Clifton Purvis with the team said investigators have been dispatched to Fort McMurray to work on the case.
"Our role is to determine whether the shooting was justified and lawful," Purvis said Sunday.
Police say they're looking for a red minivan that was in the area at the time of the shooting, as well as anyone else who may have witnessed the incident.
RCMP say they will continue to handle the original investigation into the stolen vehicle.