It happened at 11:30 p.m. PT at East Wellington and Bowen roads.
Sgt. Cam Muir, spokesman for Nanaimo RCMP, said one of the teens was sent to hospital by medevac in critical condition.
"Injuries to the occupants of the vehicle with the teenagers in it were quite severe," he said.
"We have a number of them in the hospital right now with various injuries. Unfortunately our 18-year-old driver has been [flown] to Victoria for further treatment, she's in critical condition."
Police say the driver of the other vehicle is a 19-year-old man from Ontario who was detained at the scene.
He has since been released and will face charges of impaired driving causing bodily harm, police said.