The camera phone video also includes shocking footage of the baby's mother driving the car into the water.
Laytona Kirven, 31, is thought to have deliberately driven into the marshy lake. Local police said the shocking scene unfolded after she hit a 72-year-old man, while drink driving, then fled the scene.
Tyler Arcizo, 19, was fishing with three of his friends on Monday afternoon, when they witnessed the woman drive into Offants Bayou, in Texas, US.
One of the teens had his camera phone to hand and filmed the incident, capturing the boys' horror as they realised there was a baby in the car.
In the footage one of the teenagers can be heard shouting, "Get out, she has a baby, she has a baby."
As the mother begins to swim away from the car with her son, another of the teenagers can be heard shouting, "He's under water, he's under water. Hold him up, hold him up. Hey, don't worry about yourself. Worry about your baby, your baby is under water."
That's when Taylor leapt into action and jumped into the bayou to help pull the baby to safety.
"Once the car is tipping, you see the car seat for the baby tip over," he told local news site khou.com. "My friend was like, 'There is a baby, there is a baby'.
"I was struggling with her to get the baby from her. She wouldn't give him up. She kept pulling him from me and putting him under water."
Thankfully, Taylor managed to get the baby to the shore. But he lost his keys and wallet in the water.
Police have charged Laytona Kirven with driving while intoxicated with a child in the vehicle, and aggravated assault with a deadly weapon.