A 17-year-old and a 19-year-old were on the same bike when it crashed with a grey Vauxhall Insignia in Oldham Road, Oldham
at 2.55am on Saturday.
Both cyclists were taken to hospital, where the 17-year-old died from his injuries.
The 19-year-old remains in a critical condition.
The car was driven from the scene of the crash and collided with a Skoda Octavia taxi five minutes later in Failsworth. No one in the taxi was injured.
The driver of the Insignia fled on foot after the second crash, but police had sent officers to both crash locations.
A 27-year-old man was arrested on suspicion of dangerous driving and drink driving. He remains in custody for questioning.
The car was recovered on Roberts Street, in Oldham.
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Inspector Danny Byrne, of Greater Manchester Police's serious collision investigation unit, said: "This was a horrific set of events that tragically took the life of a teenager and has left another fighting for his life, and we are doing all we can to support their families at this unimaginably difficult time.
"We immediately deployed several resources to the scenes and while we have a man in custody, our enquiries are still in the early stages and remain ongoing."
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The A62 Oldham Road at the junction with Hollinwood Avenue and junction 22 of the M60 remain closed while investigative work takes place.
Anyone with information should contact Greater Manchester Police on 101.