Newgarden's victory capped an eventful afternoon at the Brickyard that saw the start delayed by four hours due to severe storms and the race interrupted by multiple cautions.
Yet 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 8.15pm (1.15am GMT) curfew.
Newgarden gave the crowd of over 300,000 an American winner on the US Memorial Day weekend holiday. Chip Ganassi Racing's Scott Dixon was third.
"I'm just so proud of this team," Newgarden, who took a $440,000 bonus for winning back-to-back Indy 500s, said. "They crushed it - crushed it."
Starting on the front row alongside polesitter Scott McLaughlin and 2018 Indy 500 champion Will Power, Newgarden ran near the front of the 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.
Newgarden's triumph marked team owner Roger Penske's 20th win of the 'Greatest Spectacle in Racing', albeit coming with a whiff of scandal.
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 own 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," Newgarden said. "We worked our tails off.
"Luke, Tim, they're not here today but they are a huge part of this."
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