The accident happened just before 5 a.m. Tuesday on Highway 321, near Hospital Avenue. The highway was shut down for more than three hours while an accident reconstruction team investigated.
The driver of the SUV was traveling at the 45-mph speed limit and didn't see the child, police said.
Police said the toddler, Jamason Fitts, lived in a neighborhood about a quarter mile from where he was hit.
Officers think he left his home alone while his family was asleep. His parents said they saw him sleeping at about 12:30 a.m. His father was out searching for him when he came across the accident scene, police said.
"At this point, it is just a tragedy," Lt. Allen Lawrence, with the Lenoir Police Department, said. "Kids get into things and do things a lot of times that are unexpected."
Neighbors were stunned by the news of the accident.
"That is ... I don't know … that is incredible that he was there all by himself," Karina Martinez said.
Darwin Caco said he saw Jamason in the street by himself on Monday morning and took him back to his mother. Caco said the toddler's mother told him there was a problem with the front door to their home and that Jamason could open it.
"She said there was something wrong with the door," he said. "The door -- it was easy to open."
Police said they are looking into the possibility that the toddler followed the family's dog to Highway 321. Neighbors said when they saw the child outside on Monday, he was following the dog.