The crash occurred around 10:55 p.m. on March 20 at the intersection of Kiely Boulevard and Butte Street, police Lt. Matt Hogan said.
He said police and firefighters responded to find a black Honda Civic and black Mercedes Benz with significant damage.
A woman identified as Ashley Nicole Krieger was found unconscious in the Honda and had to be extricated from the vehicle, Hogan said.
She was taken to a hospital with serious injuries and she died on Sunday, he said.
Investigators determined the driver of the Mercedes, 19-year-old Vincent Mergonoto of San Jose, was allegedly racing northbound on Kiely Boulevard with Chandra Purnama, a 25-year-old San Francisco resident who was driving a yellow Chevrolet Corvette, prior to crashing almost head-on into the Honda.
Mergonoto suffered minor injuries, Hogan said, and the Corvette was not directly involved in the crash.
The drivers' speeds had not been determined Friday, but they "certainly contributed" to the crash, Hogan said.
Mergonoto and Purnama were arrested and booked into Santa Clara County Jail.
Purnama remained in custody today with no bail, while Mergonoto was released after posting $500,000 bail.
Both face felony charges of vehicular manslaughter with gross negligence when they return to court on April 7, according to Santa Clara County district attorney's spokeswoman Amy Cornell.
Purnama was additionally charged with false impersonation exposing the victim to liability for giving police a fake middle name at the time of his arrest, Cornell said.
Anyone who witnessed the crash or has information about the case is asked to call Investigator Kenia Soto at (408) 615-4764.