Wielding a knife, the man forced a taxi driver to hand over the keys to his vehicle while parked on Folkungagatan in the Södermalm area of central Stockholm at around midnight on Saturday night.
The man then proceeded to drive at high speed heading south until he was forced off the road by police vehicles giving chase on Huddingevägen.
But the man refused to accede, turned the hijacked vehicle around and headed back into traffic along the busy southern ring road.
Soon after the vehicle was involved in a violent crash with another taxi.
The taxi was carrying four passengers, including two children, who together with the driver were taken to hospital for treatment on their injuries. The 26-year-old man was also hurt in the crash.
Five of the injured were at 7am on Sunday morning being treated in hospital for various fractures and their condition is said to be stable, according to a report in the Expressen daily.
The condition of the youngest child is reported by the Aftonbladet daily to be serious but stable.
The 26-year-old man has meanwhile been arrested on suspicion of a series of criminal offences but had by 9am on Sunday not yet been interviewed by police.