The shooting happened around 12:33 a.m. near the Holiday Inn Express on Milwaukee Avenue, according to Prospect Heights police.
Before the shooting, both victims, allegedly known gang associates, were in the area of the 500-800 block of Piper Lane, police said.
While reportedly making comments about an area gang, they were approached by an alleged unknown gang members and told to leave.
The victims then went to the Fry the Coop parking lot on Milwaukee Avenue.
That's where they met two out-of-state bystanders, and offered to join them to drink beer.
"I heard several gun shots," a witness said. "I then threw the beer I was drinking up in the air and just took off sprinting."
Shortly after, an unknown person dressed in dark clothes shot about eight rounds from a handgun, police said.
One of victims was shot in the left forearm, the other in the stomach and forearm.
One of the victims went into the Holiday Inn Express lobby with gunshot wounds. A hotel employee called 911.
One was treated and released near the scene. The second victim was taken to a local hospital and is expected to recover fully.
The bystanders were not injured, according to police.
No one is in custody.