The boys' mother and father swam to the surface, but their two children weren't breathing when they were rescued from the underwater car Thursday evening, authorities said.
The teen died at a hospital a few hours later, and the younger child was hospitalized in critical condition, Officer Norma Eisenman said.
"It is being investigated as an accident until determined otherwise," she said.
The car left a parking lot at the Ports O' Call entertainment area of San Pedro shortly after 6 p.m. and ran off the road into the Port of Los Angeles.
It traveled some distance before lurching into the harbor, where it landed upside down in about 30 feet of water, Fire Department spokesman Brian Humphrey said.
Divers found the two children inside the vehicle, and they had no pulses and were not breathing, Humphrey said. Resuscitation efforts began immediately.
The adults were described as being in fair condition but "clearly emotionally distraught," Humphrey said. They were treated at the scene.
One witness said the man swam quickly to a ladder out of the water, and the woman was screaming as she came up.
"I thought she was drowning," witness Frank Palazzolo told the Daily Breeze newspaper. "She was going crazy. She was screaming, `My kids, my kids,' screaming real loud."
Divers working in murky water searched the car and even opened the trunk, but they found no one else in it, Humphrey said.
Nearly 100 firefighters, divers and helicopter and boat crews went to the scene, Humphrey said.
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