Eighteen-month-old Holly Hind was rescued by firefighters from the back of a wrecked vehicle that was in a smash with a tanker and a van.
Holly's mother Alison Hind, 28, her uncle Martyn Pugh, 47, and his parents-in-law Margaret, 65, and John Kehoe, 72, all died in the crash.
It happened at a notorious accident blackspot on the A44 at Llangurig near Aberystwyth, West Wales, as the family returned from a trip to the seaside.
Holly, who was pulled from the crumpled vehicle in a car seat, was flown by air ambulance to University Hospital of Wales Cardiff where she is in a serious condition but expected to survive.
Her father, Steve Hughes, 36, who was not involved in the crash, has been at her hospital bedside as she receives specialist care.
Holly's great-grandfather Emrys Davies, 80, said: "It is such a tragedy. The police came last night for Steve and he is down in Cardiff now with Holly in hospital. We are all just hoping she will be okay."
The family all lived in the village of Llanidloes in West Wales - where people told of their shock at the tragedy.
Friend Margaret Pugh said: "This is just terrrible - they were a very close and caring family. The one comfort we can take is that the little girl survived. We are all praying she will be fine."
Alison Hind and Steve Hughes have another son Ethan, six, who was in school at the time of the tragedy.
Martyn Pugh lived with his partner Lynn Kehoe, 39, in the village of Llanidloes. He was a full-time carer for disabled Mr Kehoe who lived in a neighbouring street with wife Margaret.
He had taken the couple along with niece Alison - known as Ali - for the trip to the seaside town of Aberystwyth with baby Hollie because of the warm weather.
Llanidloes councillor Gareth Morgan said: "It is a dreadful shock - four in the car were killed but the little girl miraculously escaped.
"I often see Martyn with the little girl in the town walking their chocolate Labrador. She is a lovely child.
"They are nice people. Martyn was Mr Kehoe's carer because he hadn't been in good health for some years. He lived with their daughter Lynn who wasn't in the car at the time of the tragic accident.
"I imagine Martyn had taken his girlfriend's family out for a day trip when this terrible accident happened. They had been to Aberystwyth 29 miles away and were returning home when the accident happened.
"It was at a real accident blackspot, one of the most dangerous stretches of road in Wales. Fatal accidents have happened there far too frequently.
"But everyone here in Llanidloes uses the road regularly to get to Aberystwyth and the coast.
The tanker driver was taken from the scene by police, who are investigating the cause of the crash.
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