Emergency services were called to the Great Western Highway at Wallerawang, about 15km north of Lithgow, after a five-car crash.
Two people died at the scene.
At least a dozen people were treated by paramedics at the scene for various injuries.
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“Officers from Chifley Police District have established a crime scene and are awaiting the arrival of specialist police,” police said.
The Great Western Highway is closed in both directions and police say it will remain a crime scene for a considerable amount of time.
“Motorists are urged to avoid the area,” police said.