The collision took place at the junction of the main road with Betty Haunt Lane.
Firefighters, paramedics and police were called at 10.38 and the two people were taken to St Mary's Hospital.
The roof was removed from their car in an operation lasting nearly an hour and two people in the other car - who are not believed to have suffered serious injuries - were also taken to hospital.
The road was closed and police organised diversions.
*Police today (Tuesday) appealed for information following the collision.
A spokesman said a red Suzuki Jimny and a blue Renault Clio were in collision in Forest Road near the junction with Whitehouse Road at around 10.30am.
The Clio driver, a 79-year-old man from Cowes, was seriously injured and taken to St Mary’s Hospital, according to police.
The passengers, an 85-year-old woman and a 46-year-old man, and the driver of the Jimny, a 58-year-old woman, were taken to St Mary’s with minor injuries and later discharged.
Road closures were in place until shortly after 2pm to allow police to recover and investigate the scene.
Officers would like to hear from anyone who witnessed the collision or saw either vehicle driving prior to it.
Anyone with information can contact the Shanklin roads policing unit on 101, quoting Operation Petalyte.