The mother allegedly abused police and emergency services staff as they tried to free her daughter at the scene of the Andersons Bay Rd crash.
Police said speed and alcohol were believed to be contributing factors.
Moments before the crash, the woman's car was involved in a nose-to-tail accident at the intersection of Castle St and Frederick St, Acting Sergeant Hugh Tait, of Dunedin, said.
The woman left the scene without ascertaining if anyone had been injured and continued south along Cumberland St, reaching speeds of more than 120kmh, he said.
The woman's red Mazda failed to take the bend on to Andersons Bay Rd and crossed the median strip between the north- and south-bound lanes, he said.
The vehicle collided with a north-bound Toyota Rav 4 and then continued another 150m down the road before crashing into a traffic light at the intersection of Andersons Bay Rd and the motorway.
Debris was scattered about 50m along Andersons Bay Rd.
Acting Sgt Tait said when police arrived at the scene, the woman was lying on the road. It is believed she had been thrown from the vehicle.
She was handcuffed and taken to Dunedin Hospital because she was "not being co-operative with police and was refusing medical attention", he said.
"It's incredible, the attitude of the driver ...
"For her to lose control and go over the median barrier into three lanes of oncoming traffic - it's beyond belief that no-one was seriously injured."
Acting Sgt Tait said no-one was injured in the earlier incident, but the mother and daughter were taken to Dunedin Hospital with minor injuries following the second accident.
The driver of the Toyota Rav 4 was also taken to hospital for observation.
Senior Sergeant Chris George, of Dunedin, said the woman was likely to be charged with reckless driving causing injury, refusing a doctor's request for an evidential blood-alcohol test, and careless use. She might also be charged with assault for abusing police and ambulance officers, he said.
