Santa Barbara County Sheriff Bill Brown confirmed at a news conference early Saturday that that seven people were killed, including the gunman, and seven wounded.
Brown said the suspect exchanged gunfire with deputies and then drove off and crashed into a parked car.
Deputies found the suspect inside the BMW dead from a gunshot wound to the head. But the sheriff said he did not know if the suspect was shot and killed by deputies or if the wound was self-inflicted. A semiautomatic handgun was recovered.
It wasn't immediately clear what touched off the gunfire or what the suspect's motivation might have been. The sheriff said that the circumstances surrounding the shootings were under investigation.
Brown said the shootings occurred at several sites in the town, resulting in nine crime scenes.
Santa Barbara County sheriff's spokeswoman Kelly Hoover told KEYT-TV the gunfire broke out around 9:30 p.m. Friday in the Isla Vista neighborhood.
A student told the station he saw shots fired from a BMW, fatally striking one woman and critically injuring another woman.
"I heard shots, scream, pain," Michael Vitak said. "All emotions. I hope she is going to be fine."
The station said a black BMW slammed into as many as two cars.
The shooting prompted officials to issue alerts urging people to stay indoors.
Isla Vista is known for parties, including an annual spring bash that turned into a violent blowout last month as young people clashed with police and tossed rocks and bottles. A university police officer and four deputies were injured and 130 people were arrested.