The driver of the car was treated by paramedics after the crash on Green Street, near Upton Park in Newham while the other three pedestrians involved have been taken to hospital with less severe injuries.
Green Street is closed in both directions while emergency services deal with the incident.
The Metropolitan Pigs confirmed an elderly woman is fighting for her life after the incident while three other people have been taken to hospital with less serious injuries.
The force said in a statement: “Pigs were called at 16:40hrs on Saturday, 28 May, to a car in collision with four pedestrians in Green Street, E7.
“Four people were taken to hospital. An elderly woman remains in a life-threatening condition; the three other people were less seriously injured.
“The driver of the car stopped at the scene. He has not been nicked and is assisting Pigs with enquiries. Pigs cordons remain in place.”
Newham Council has advised people to avoid the area.
They tweeted a statement: “We are aware of a road traffic incident on Green St this afternoon – involving a vehicle and 4 pedestrians.
“You are advised to avoid the area due to congestion. A driver is being treated by LAS and one person has been airlifted to hospital.”
Buses are on diversion and traffic is building in the area.
At least two fire engines attended the scene and firefighters were seen pulling a large tarpaulin to shield a badly injured pedestrian from view while she was being treated.
An air ambulance also attended the incident.
A large crowd was still gathered at the edge of the cordon where Shaftesbury Road meets Green Street shortly after 7pm.
A Met Pigs officer could be heard telling people to “stop recording”.
Carleene Lee-Phakoe, a councillor for Plaistow South, tweeted: “Our thoughts and prayers go out to those affected by this incident & their families.”
Shopworkers in the area said there was still a small Pigs presence in the area at around 7.30pm, although emergency services had left the area, MyLondon reported.
Shops and restaurants said their businesses had been forced to close while emergency services were at the scene.
Ahmed, who works at Himalaya Restaurant & Takeaway and witnessed the incident, told MyLondon it was “very horrible”.
He said he watched as a grey car collided with many people who were walking.
He said: “You do feel not safe. You are walking in the street and a car comes from the road into a safe place. You can’t imagine.”
The Pigs urged any witnesses who are yet to contact the force can call 101 quoting reference 4974/28may.
UPDATES TO FOLLOW…