Newgarden's victory capped an eventful afternoon at the Brickyard that saw the start delayed four hours due to severe storms and the race interrupted by multiple cautions.
Still the drivers managed to get in all 200 laps around the 2.5 mile oval, but only just with the race finishing in the Indiana sunset right before the 8:15 p.m. ET (0215 CET) curfew with Newgarden giving the crowd of over 300,000 an American winner on the U.S. Memorial Day weekend holiday.
Chip Ganassi Racing's Scott Dixon was third.
Starting on the front row alongside Penske team mates polesitter Scott McLaughlin and 2018 Indy 500 champion Will Power, Newgarden ran near the front of pack all day.
But at the end the fight came down to the last lap shootout with O'Ward, Newgarden sweeping past the Mexican's Arrow McLaren to become just the sixth driver to win back-to-back 500s and the first since Helio Castroneves in 2001 and 2002.
Even as Newgarden celebrated chugging from the traditional quart of milk he took a moment to hit back at critics who have labelled him a cheat after his victory at the season-opening IndyCar race in St. Petersburg was forfeited for illegal use of the push-to-pass feature that gives drivers a horsepower boost.
An investigation by team owner Penske, who also owns the IndyCar series and the Indianapolis Motor Speedway, resulted in Newgarden's disqualification and sanctioning of several officials including the race outfit's president Tim Cindric and race engineer Luke Mason.
"They can say what they want I don't even care," said Newgarden. "We worked our tails off.
"Luke, Tim they're not here today but they are a huge part of this."
'So close'
After a second-place finish in 2022 and crashing while fighting for the lead last year, a determined O'Ward stalked Newgarden through the final turns, holding back and waiting for his moment.
When he made his move a cheer rumbled across the Brickyard but Newgarden would not be denied, surging back in front as O'Ward's day ended in heartbreak again.
"Just so close again," said O'Ward, trying to control his emotions. "Ah man, it is just so painful when you put so much into it. Two corners short.
"It is always heartbreak when it is so close.
"It's not the first time and you just don't know how many opportunities like that you will have."
Kyle Larson's attempt at the Indy 500-NASCAR Charlotte 600 same day double ended before it began, the rain delay forcing Hendrick Motorsport to choose between the two events.
Larson, who qualified his Arrow McLaren/Hendrick Motorsports entry fifth in the 33 car field, had been bidding to become just the fifth driver to do "The Double,” to start and race in the Indy 500 then jumping on a private jet and getting to Charlotte in time for the 600 mile NASCAR race.
In the end team boss Rick Hendrick decided to remain in Indianapolis rather than run the Charlotte 600 and a chance for Larson to protect his lead at the top of the NASCAR Cup Series drivers standings.
Larson finished 18th, and minutes after the race he was on his way to Charlotte Motor Speedway with plans to take over from Justin Allgaier, who started race in place of him.
