The crash happened at the intersection of 35th and Halsted streets in Bridgeport just after 10:40 a.m., Chicago police said.
The bus involved in the crash was the northbound No. 8 Halsted bus, according to the CTA.
Surveillance video from the scene shows the out-of-control bus also hit a building before slamming into the cars.
CPD said there were a total of 11 vehicles involved in the crash.
At least five people had to be taken to the hospital.
Chicago fire officials said two children were taken to Stroger Hospital in good condition, one adult was taken to Insight hospital in fair condition and two adults were taken to University of Chicago Medical Center in serious to critical condition.
"I was going southbound; the bus was going northbound, and I happened to see him swerving. And there I hopped the curb," crash victim Jonetta Jones said. "When I hopped the curb, I saw other cars. It was crazy, like out of a movie, unbelievable. I just thank God it wasn't too serious."
Jones managed to avoid the bus, but others were not so lucky.
SEE ALSO: Driver of truck in Florida bus crash that killed 8 farm workers charged with DUI manslaughter
Jones' 10-year-old grandson ran over to help a family whose car was dragged by the bus.
"One of them had a scratch on her neck, and said, if you keep moving, it will hurt more. So, don't touch it or move it. So, after that, the police came. It was big ole mess," crash victim Montclair Jones said.
The mess included much more than smashed up vehicles.
"We just saw all of the brick, light post, pay stations, everything taken out on this whole street," witness Courtney Popek said.
"I was up in my apartment, and I heard a loud crash. I assumed it was the bus hitting the building," witness Keenan Slade said.
With its windshield knocked out, the bus came to rest about a half-block north of 35th Street, as it dragged a parking pay station underneath it. A witness said it appeared the driver may have suffered some type of medical episode.
"The bus driver looked like an old man, and I see him checking himself and his body. It looked like he was scared, like something happened to him," witness Ahmad Mumni said.
The CTA did not immediately provide any additional information about what caused the crash or the driver's condition.
Roadways in the area had reopened by about 4 p.m., and bus reroutes had ended.