Police say the crash happened when the driver went around the gates.
Two others, including a toddler, were seriously injured in the crash.
It happened just after 9 a.m. Friday morning at a multiple track crossing on the Lake-Porter County border line on County Line Road at Highway 12 in Gary.
The impact of the train hitting the car pushed the car several hundred yards.
Two people survived, the young woman riding as a passenger in the front seat and her 18-month-old baby strapped inside the backseat. The woman was transported to Methodist North Lake Hospital and the baby was taken to the University of Chicago Hospital. Both are listed in serious condition with internal injuries.
Gary Police Lt. Samuel Roberts says the victims' white car went around the down gates at track crossing on Lake-Porter County Line Road after an eastbound freight train went through and was struck by a westbound South Shore train.
"According to the witnesses, that is what occurred, the driver of the car went around the gates after the first train passed, and that that shows the danger of being unaware that a second train may be coming."
The South Shore train was an eight-car commuter train on its way to Chicago. The train struck the driver side. The driver, 20-year-old Taajae McKinley of East Chicago, was killed and the backseat driver's side passenger, 19-year-old Victoria Lucio of Merrillville, was also killed.
Marquis Pratts of Gary, the mother of the 18-month old toddler, was transported to Methodist North Lake Hospital in Gary. Family members were too distraught to talk with ABC 7.
John Parsons, of the Northern Indiana Commuter Transportation District, says they are investigating the accident.
"The dynamics, the physics associated with the accident will all be part of the download of the event recorded on the train," Parsons said.
Parsons added that the South Shore train had approximately 500 commuters on it at 9:15 Friday morning.
"We advise the traveling public to heed the railroad warning devices. That's why they're there," said Parsons.
The same railroad crossing has been the site of several fatalities over the years. In April 2008 an Amtrak train struck and killed two Gary residents who also drove around the crossing gates.
The year before, three people were killed in two separate accidents when drivers pulled around the gate and were struck by a South Shore train.