Emergency services were called to the junction of Norton Road and Wolverhampton Road, in Pelsall, shortly before midnight on Wednesday.
The man suffered serious injuries, and despite the best efforts of paramedics he was confirmed dead at the scene.
The 21-year-old had been a passenger in a stolen blue Ford Fiesta which was involved in a collision with a VW Golf.
Two other passengers, both men in their late teens and early 20s, were also injured, one seriously but not life threatening and the other received minor injuries. Two men in their 30s from the Golf were also treated in hospital for minor injuries.
The driver of the Fiesta, which had been reported stolen, made off from the scene and efforts are now on-going to trace him.
Sergeant Julie Lyman, from West Midlands Police’s Serious Collision Investigation Unit, said: “We are trying to piece together the circumstances in which this young man has lost his life and I would ask anyone with information to contact us.
“I would also ask the driver of the Fiesta to do the right thing and hand himself in so that we can hear from him how this crash happened.”
The road remained closed for a number of hours while collision reconstruction was carried out.
A spokesman for West Midlands Ambulance Service said: “One person has died and four others were taken to hospital following a road traffic collision in Pelsall last night .
“West Midlands Ambulance Service was called at 11:54pm on Wednesday to reports of collision involving two cars at the junction of Norton Road and Wolverhampton Road. We sent five ambulances, two paramedic officers, a MERIT trauma doctor and a HART paramedic to the scene.
“On arrival, crews found five patients from the two cars. One of whom, a man, was found to have suffered serious injuries in the incident. He received specialist trauma care but unfortunately, despite the best efforts of ambulance staff, nothing could be done to save him and he was confirmed dead at the scene.”
“The second patient, a man, had suffered serious injuries, he was assessed and given trauma care on scene and was conveyed to Queen Elizabeth Hospital Birmingham by land ambulance, on blue lights and sirens.
“A third man was treated for potentially serious injuries whilst two more were treated for injuries not believed to be serious. All three were transported to Walsall Manor Hospital for further treatment.”
Brian Morris, local resident, said: “There’s been a few accidents up here, but there’s never been a fatal one before.
“It is a bit of a dangerous junction and I think something needs to be done to make it safer as people race up and down here in the night, particularly on Norton Road.
“I do think it’s been an accident waiting to happen and I’m just shocked at the severity of this one.”
Anyone with information is urged to email West Midlands Police at FL_COLLISION_INVEST@west-midlands.pnn.police.uk, or call officers on 101, quoting log number 4892 of June 23.
Alternatively, witnesses can call Crimestoppers anonymously on 0800 555111.