The child's grandfather, who had been pushing the stroller along the lakeside Friday afternoon, jumped into the harbor to try to save the boy, the Chicago Fire Department said.
Witnesses said the frantic grandfather struggled in the frigid water, just off a 70-foot long pier, pointing a few feet away and shouting in broken English, "Child! Child!"
"He was just moaning in the breakwater, crying," said John Derscheid, who called 911.
Winds in the area at the time were about 20 mph with gusts about 30 mph, a meteorologist said.
The boy was in critical condition at Children's Memorial Hospital, authorities said Friday night. But a spokeswoman declined to comment on Saturday.
The grandfather, who appeared to be in his 60s, was in fair condition Saturday afternoon at St. Joseph Hospital, where he was being treated for exposure.
The toddler was strapped in the three-wheeled jogging stroller about 10 feet below the surface of the 42-degree water before rescue divers pulled the unconscious boy out.
Derscheid said the scene was traumatic and "is going to stick with me for the rest of my life."