The crash happened around 1:35 p.m. Wednesday in the 2600 block of Main Street (Route 206).
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Police say the driver of a Mazda crashed into the side of the building, knocking down the staircase leading to second-floor apartments which are above the Chambers Walk Cafe.
"I was in the back part of the building, heard a tremendous boom, and then ran outside and people were already gathered by the side door," said cafe owner Mario Mangone.
The driver, a 72-year-old man from Bucks County, Pennsylvania, was rushed to the hospital. Police say his condition is still being evaluated.
Chopper 6 was overhead as a family with two young children and a woman were loaded into the bucket of the fire department's ladder truck and brought to safety.
Chopper 6 over apartment building rescue in Mercer County
There were no reported injuries to residents.
"It's bizarre," said Mangone. "I mean he comes across the lawn and the two driveways for Starbucks, but the retaining wall isn't damaged at all. He must've come clearly over it and into the wall."
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Magone says the inside of his restaurant is "not terrible."
"It does have a crack in the wall, but there are inspectors here already and they said it's OK," said Mangone.
The cause of the crash remains under investigation.
Anyone with information is asked to contact Officer Shareef Hardin at 609-896-1111 or shardin@lawrencetwp.com.