The incident happened on Mathews Drive near Pleasant View Avenue in Bloomingdale on Thursday morning.
Authorities say officers fired four shots into the windshield of the SUV, killing the suspect, later identified as 32-year-old Michael Rivera.
The front driver's side window of a Riverdale police cruiser was also riddled with bullets, though it's unclear where they came from.
Rivera was wanted in connection with a shoplifting incident at a Home Depot in neighboring Riverdale around 9:30 a.m.
WATCH: NewsCopter 7 over the shooting scene in Bloomingdale
Police had the vehicle stopped when the driver took off, and authorities say the driver nearly ran the officer over as his vehicle sped away.
The SUV was then spotted in Bloomingdale,driving erratically and at high speeds on Hamburg Turnpike.
Police say the driver turned into a residential neighborhood and ended up at a dead end on Mathews Drive, where turned around in an apparent effort to flee.
Authorities say a police vehicle was blocking his path, and as the officer was attempting to exit, Rivera struck his car, pinning him. That's when police say the officer opened fire.
Area residents said they couldn't believe the chaos they were witnessing.
"I saw him almost hit the police car," witness Peggy Wanklin said. "He had to jump the curb to go around the police car, and then the suspect went straight down (the road). Police backed up and chase him, and it was over 10 seconds later, 30 seconds later. It was over."
One officer was taken to Chilton Medical Center in Pequannock with minor injuries.
A nearby school was briefly placed on lockdown as a result of the incident, which is being investigated by the New Jersey State Attorney General's Office.
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