Can Two Players Play GTA IV Online on One Xbox 360?

No. Grand Theft Auto IV has no split-screen or local co-op in any mode. Online multiplayer (Free Mode, races, deathmatches) requires each player on a separate console with their own Xbox Live Gold account.

Local Options

• Pass-the-controller: Take turns in single-player missions.
• System Link (LAN): Two 360s + two copies + router/crossover cable – plays multiplayer offline, but still one player per console.

For couch co-op open-world crime, try Saints Row 2 (split-screen co-op campaign) or GTA V (no split-screen, but two consoles + two copies works).