Emergency services were called to the scene of the five-vehicle crash on the Great Western Highway at Wallerawang, 15km north of Lithgow, just before 1pm on Friday.
Police on Saturday confirmed two men, aged 42 and 49, were trapped in their vehicles and died at the scene.
A 41-year-old woman and five children aged five to 15 were in one of the cars and suffered minor to serious injuries, with one child remaining in a critical but stable condition in Westmead Children's Hospital.
The driver of another vehicle, a 55-year-old man, suffered multiple fractures and was airlifted to John Hunter Hospital where he remains in a stable condition.
His two passengers were also taken to hospital for treatment and are stable.
Other passengers were assessed at the scene and two drivers of other cars involved were taken to hospital for mandatory testing.
Police said one of the vehicles involved in the crash was towing a motorcycle trailer and another was towing a caravan.
Detective Superintendent Paul Glinn said it was a "significant scene" attended by 80 rescue personnel including police, paramedics, Fire and Rescue NSW, Rural Fire Service, VRA Rescue and the State Emergency Service.
"There was one lane eastbound, two lanes westbound (and) it would appear that a vehicle has crossed to the incorrect side of the road," he told reporters on Friday.
Specialist police had been called to assist with an investigation into the crash.
"The investigation is in its infancy, there are investigators on scene from the local police district and we also have crash investigation police here to undertake a review of the circumstances of the collision," Det Supt Glinn said.
"We would be appealing for members of the public perhaps that were in the area that may have witnessed the collision or have some sort of dash cam footage to make contact with us."
Police will prepare a report for the coroner.
5°C