The 71-year-old star, who won an Academy Award for his role in 2004's Million Dollar Baby, was hospitalised after the crash late Sunday near Ruleville, Mississippi, reports said.
Details of Freeman's condition and injuries were still emerging, but a spokesman for the Memphis Regional Medical Center described them as "serious."
"All I can say is one word: His condition is serious," spokeswoman Kathy Stringer told People magazine.
Freeman's publicist confirmed the star broke his arm and shoulder, US websites reported.
Other reports cited friends of the actor as saying he was sitting up in bed and talking.
Freeman, who acted alongside Heath Ledger in Batman blockbuster The Dark Knight, was hospitalised after the car he was driving went off the road and flipped several times, the Mississippi Highway Patrol said.
Rescue workers used the "jaws of life" to cut Freeman and his female passenger from the wreckage.
They were airlifted to the Regional Medical Center in Memphis. Mississippi state police said the actor was talking before being transported to the hospital.
The condition of Meyer was unclear.
Freeman won the statuette for best supporting actor for his role as former boxer Eddie "Scrap-Iron" Dupris in Clint Eastwood's boxing drama Million Dollar Baby, and is famous for his authoritative, calm voice that has been used to narrate documentaries and commercials as well as film roles.
The prolific actor, born in the southern US state of Tennessee, began acting in theater productions in 1967 before moving on to film, where he has carved out a career from playing wise and determined characters.
He played the US president in the disaster flick Deep Impact (1997) and portrayed an even more powerful character — God — in Bruce Almighty (2003), a comedy starring Jim Carrey.
Freeman earned the first of his four Oscar nominations with his 1987 role as a tough pimp in Street Smart. Although he failed to win best supporting actor, he was rewarded for his role by US film critic associations.
His moving portrayal of a chauffeur in the segregated US South in Driving Miss Daisy (1989) won him a Golden Globe in the United States and a Silver Bear at the Berlin film festival. He also earned his second Oscar nomination for the film, this time for best actor.
In the moving 1989 drama Glory, Freeman played a soldier in the first all-black volunteer company to fight for the North in the US Civil War.
He starred alongside Kevin Costner in Robin Hood: Prince of Thieves (1991) and with Brad Pitt in the crime thriller Seven (1995).
The father of four earned his third Oscar nomination, a best actor nod, for his role in The Shawshank Redemption (1994), based on a Stephen King novella about a banker who is wrongly convicted of murder.
Freeman is currently working on another collaboration with Eastwood, The Human Factor, where he is due to play former South African president Nelson Mandela in a film based on the 1995 Rugby World Cup
