Sheriff's units from Altadena and surrounding stations set up a perimeter on several streets on the 400 block of Terrace Street around 1:45 p.m.
The incident happened after deputies attempted to stop a suspicious vehicle in the 400 block of Mendocino Street.
The driver of the vehicle, later identified as 32-year-old Eddie Vasquez, parked the stolen 2006 Toyota Camry in a driveway on Mendocino Street and fled the area on foot.
He left behind a passenger, identified as 22-year-old Nancy Carrillo.
The surrounding neighborhood was kept on lockdown for two hours as deputies and K-9 dog units searched the area.
The suspect had so far eluded officers, but a police dog K-9 unit located the suspect in a crawl space below a house under construction.
He was taken into custody on grand theft auto and possession of stolen property charges. Carrillo was arrested for possession of methamphetamine.
Vasquez is being held in custody in lieu of $35,000 bail. Carrillo is being held on $10,000 bail.
They are both scheduled to appear in Pasadena Superior Court Friday.
Anyone with information about this incident is encouraged to contact the Los Angeles County Sheriff's Department's Homicide Bureau at (323) 890-5500.