Minneapolis Police said in a statement that the driver, who protesters pulled from the car after the collision, was taken into police custody. He also received treatment at an area hospital.
The police said their preliminary investigation indicated that the use of drugs or alcohol by the driver may have contributed to the crash.
The Uptown neighborhood where the incident took place has been the scene of protests after U.S. Marshals shot dead a Black man, Winston Boogie Smith Jr., earlier this month.
A man at the scene said in a livestreamed video posted to Facebook that people were playing Red Light Green Light in the street after a volleyball game when a car sped up, went through trash cans, hit another car that then hit a woman.
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The video also showed people on the street handing a white man over to police.
It was not immediately clear why there was a discrepancy in the police and the bystander's accounts.
A 35-year-old St. Paul man, Nicholas David Kraus, was being held without bail for alleged vehicular manslaughter, according to Hennepin County jail records. He was booked into custody at 4:17 a.m. on Monday.
The Uptown incident was the only fatal car crash late Sunday night or early Monday morning in Minneapolis or Hennepin County, according to a medical examiner investigator.