Brandon Holt, from Toms River, New Jersey was shot with a .22-calibre rifle by his young neighbour.
The younger child, whose identity has not been released, got the gun from his home and fired it accidentally on Monday evening.
Prosecutor Joseph Coronato said the children were about 15 yards apart when the rifle was discharged, in a neighbourhood that residents described as 'very quiet'.
The mother of the child who fired the gun called the police following the shooting, and was reportedly very upset in the minutes following, appearing to try to comprehend what had happened.
Debbie Coto, who lives a few doors down from the two families involved, said: "I'm sad for the children involved and their families, but I'm angry with whoever owns that gun and allowed a little child to get hold of it. A four-year-old can't load a gun.
"I had just been telling my sister how nice it is to see kids playing together and enjoying themselves, and then this happens."
Toms River police chief Michael Mastronardy described the shooting as tragic and said it had affected the whole community.
The two families involved are said to have not ived in the area long.
Mr Coronato said it was too early in the investigation to know whether anyone would be charged. He would not say who owned the gun or speculate on how the four-year-old got hold of it.