The 29-year-old man was in the back seat of the idling patrol car Sunday afternoon when he somehow climbed into the front seat and started driving, police said.
"The suspect was able to slip out of his handcuffs or get them in front of his body, climb over the caged partition and into the driver's seat," Billings Police Chief Rich St. John said.
The car backed up and hit a tree, then pulled forward and hit Officer Dave Punt, who fired nine shots, St. John said. The car stopped after hitting other vehicles.
"The cop started yelling at the car and it went straight at the officer," witness Brian Bersuch told The Billings Gazette. "It went by him and I heard about 10 or 12 rounds fire. I watched as that window just disintegrated in the back of the cop car."
Paramedics performed CPR on the suspect, and he was transported to a hospital, where he was pronounced dead. His name has not been released.
St. John said Sunday that he did not know if the man died as a result of being shot or from the crash. An autopsy was planned.
Under standard procedure, Punt has been placed on administrative leave while the shooting is investigated. He was treated for minor injuries at a hospital and released.
"My No. 1 concern is his well-being," St. John said of Punt. "This is a life-changing event for him and his family."
The shooting occurred after the Billings man was arrested Sunday on suspicion of burglary after an hourslong standoff. The man's wife also was arrested in the burglary. Her name also has been withheld.
Police received a call shortly before 9:30 a.m. Sunday when a woman reported a possible burglary at a house she was watching for someone who was out of town.
Responding officers spotted two people and at least one rifle and called in a SWAT team and a police negotiator.
After several hours, officers brought out a man and woman, both handcuffed. They were placed in separate patrol cars.
Brian and Nancy Bersuch said they learned about the standoff while listening to a scanner and drove by the neighborhood on their way home from a store.
"They had the woman sitting on the front bumper of one of the new patrol cars," Brian Bersuch said. "They had the guy farther up the street and they put him in the back of that car."
Bersuch said he and his wife watched as an officer got into the front seat and then got out. He noticed somebody other than the officer was driving the car and yelled: "They're stealing your car!" Bersuch told the newspaper.
Another witness, Janielle Jacobson, told KULR the suspect was "laid over in the seat" by the time the patrol car hit a pickup truck across the street.