Police said the man had been behind the wheel of a Ford Transit Connect Van when it crashed in Lodge Lane, Warton shortly after 1am on Saturday (June 26).
One of his passengers, a 19-year-old man, was found unresponsive at the scene, at the junction with Carr Lane and Huck Lane, and later died in hospital.
The 21-year-old driver, from Warton, was taken into custody and arrested on suspicion of causing death by dangerous driving, and drink or drug driving.
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He has since been bailed until Saturday, July 24. No charges have been made at this stage.
Three other passengers in the van were also injured and needed hospital treatment.
A 36-year-old man and a 17-year-old boy both suffered whiplash injuries, and a 31-year-old woman was taken to hospital with a lower back injury. She remains in hospital today (Monday, June 28).
All three, from Warton, have been arrested on suspicion of causing death by dangerous driving, but they have since been released under investigation pending further enquiries.
Police are appealing for information and are keen to speak to anyone who saw the van in the moments before the crash.
Sgt Steve Hardman, of the Serious Collisions Investigation Unit said: "These are very sad and tragic circumstances and my thoughts are with the man and his family at this difficult time.
"We have made a number of arrests but would be keen to speak to anyone who saw a Ford Transit Connect van in the area around 1am today.
"If you have any information and can help us please come forward."
Anyone with information can call 101 or email [email protected] quoting log 0087 of June 26.