Starting fourth on the grid, Dixon was aiming for his second victory at the Brickyard but a brake issue saw him head to the pits at lap 31 and lose ground on the field. He re-joined three laps back and was chasing for the rest of the race, finishing 23rd.
Dixon, made his 408th career IndyCar start to break Mario Andretti’s all-time record.
Marcus Armstrong was the best of the Kiwis in 21st.
Dixon’s Chip Ganassi Racing teammate Alex Palou claimed victory, his first at the Indy 500.
Palou, the three-time defending IndyCar champion, led on the final lap which has often been a bad spot at the Brickyard with some late victories in recent years coming via a last-lap overtake. But he held off a charging Marcus Ericsson before a yellow flag on the final corner secured the win.
Palou became the first Spaniard to reach Victory Lane after 200 laps over the famed 2.5-mile (4km) Indianapolis Motor Speedway oval and made his breakthrough in his 29th oval start.
“I cannot believe it. What an amazing day. What an amazing race,” Palou said. “It’s amazing to be here. It’s amazing to win.”
Palou, who won three of the past four Indy Car season titles and has won five of this year’s first six IndyCar races, took the checkered flag under caution after a crash well behind the leaders’ fight.
Palou, who started on the outside of the second row, passed Ericsson on the inside at the first turn with 14 laps remaining and was drafting off slower cars over the final laps.
He was well ahead coming out of the last turn on the final lap when the caution flag came out and he continued over the finish line to complete his historic triumph.
“There were some moments that I felt really good in the race,” Palou said. “But at the end I didn’t know if I was going to be able to pass Marcus or not, but yeah, made it happen.”
“That was painful to miss out so close again, second time second,” Ericsson said.
After the victory, Palou stopped the car and ran down pit row to celebrate with his crew and team owners.
“Amazing. Best celebration ever,” Palou said.
Two-time defending champion Josef Newgarden’s bid for an unprecedented Indy three-peat ended with a fuel pressure issue on the pit lane on lap 135.
“It’s tough not to have a shot at the end,” he said. “We didn’t get to see what we had.”
After a rain delay of about 45 minutes, the race began in cool and overcast conditions and chaos quickly followed.
Marco Andretti, grandson of racing legend Mario, crashed out on the first lap, hitting the outer wall in the first turn of the race.
“Whoever was next to me crowded me and I ran out of room,” unharmed Andretti said.
Japan’s Takuma Sato, a two-time Indy 500 winner, was leading near the midway of the race but skidded six feet past his pit stop point and had to be rolled back for refueling, dropping him back.
Israeli rookie pole sitter Robert Shwartzman struck four members of his pit crew as he lost control entering his pit box, ending his day.
“Felt really strange, my brakes. I locked both front tires,” he said. “Luckily nobody got really hardly injured. It was really scary. When I braked I was just a passenger.
“It’s really sad because we did such a great of qualifying. This is Indy. We just need to learn from it.”
American Kyle Larson’s bid to run every lap at Indy and a 600-mile NASCAR race on Sunday night at Charlotte was foiled with a restart crash into the outer wall of turn two on lap 92 that also took out American Sting Ray Robb.
“I got tight behind Takuma and got loose, got all over the place so I spun,” Larson said. “Bummed out. Will try to get over it quickly and get on to Charlotte.”
Dutchman Rinus Veekay struck the pit lane inner wall before the refueling areas began.
“Just really had no bite on the brakes,” Veekay said. “I was trying to hit the brakes as hard as possible and the left rear locked up. Really unfortunate.”
American Alexander Rossi’s car caught fire while being refueled but there were no injuries.
“It’s so disappointing,” he said. “All I know is the gearbox was starting to go. It was a gearbox issue.”
