The incident happened in Upper Street near Canonbury Lane just before 8am today (April 10).
Officers and London Ambulance Service crews attended and found four people injured.
Upper Street Islington crash: Live traffic updates
One driver, a man in his 20s, was arrested on suspicion of causing serious injury by dangerous driving.
He was taken to hospital with non-life-threatening and life-changing injuries.
The driver of another car, a man, and a female passenger in her 40s, were also taken to hospital.
The woman remains in a life-threatening or life-changing condition.
A spokesperson for Metropolitan Police said: “Police were called to a collision involving two cars and a building on Upper Street, Islington at around 07:58hrs on Thursday, 10 April.
“One driver, a man in his 20s, was arrested on suspicion of causing serious injury by dangerous driving.
“He was taken to hospital with non-life-threatening and life-changing injuries.
“The driver of the other car, a man, and a female passenger in her 40s were taken to hospital.
“The female remains in a life-threatening or life-changing condition.
“The road remains closed for investigation and recovery. Enquiries continue.”
