The Los Angeles County Sheriff's Department said the actor lost control of his Saturn station wagon on a winding street at approximately 2 a.m. (local time) this morning near La Canada Flintridge.
He crashed into a brick mailbox, causing the car to roll onto its roof.
The 18-year-old was the only passenger in the vehicle. Investigators say he was not wearing a seat belt.
Osment's agent disputes those claims, saying he did have his seat belt on, but when the airbags in the car deployed, he undid it so that he could get out of the vehicle as he crawled in the back to get out.
Witnesses on the scene described the actor as being "seriously banged up."
Eyewitness Mark McAdams said the crash was so severe that, "I thought it was a fatality at first."
The actor is expected to spend another night in the hospital, but is expected to make a full recovery.
Authorities are awaiting test results to determine if alcohol or drugs played any part in the accident.
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