About 100 people were inside Gregory's on the 800 block of Shore Road in Somers Point, New Jersey when a speeding car rammed the place at about 1 a.m.
Investigators say the car, driven by Antonio Vargas, 21, of Somers Point, was allegedly traveling at a high rate of speed south on Shore Road when it crashed.
Vargas was flown to Atlantic City Medical Center where he was last reported to be in critical condition.
Vargas' passenger, Kevin Botta, 33, of Somers Point, was pronounced dead at the scene. An autopsy on Thursday showed he died of multiple traumatic injuries.
A pedestrian, Joseph Higbee, 26, of Northfield, who was standing outside of the bar, was struck by a fire hydrant that flew some 30 feet after being hit by the out-of-control car.
Higbee was flown to Atlantic City Medical Center where he was last reported to be in serious condition.
Friends say Higbee was at the bar celebrating his birthday and was hit after he stepped outside for a smoke.
John Phister is a tow truck operator who arrived at the scene to find he knew two of the injured people.
"It's unfortunate. I do tow accidents and it doesn't really hit you until it's someone close to you," Phister said.
Gregory Gregory is the long-time owner of the bar, which has been in Somers Point since 1946.
"Of all the times this place has been here, this is one of the saddest times we've ever had," Gregory said. "A loss of life is a shame at any time."