Sato powered past Castroneves with only five laps to go in the 200-lap race around the 2.5 mile (4.02 km) oval then bravely held off the Brazilian while screaming in delight as he took the checkered flag.
"Unbelievable feeling," said Sato, who went winless in seven seasons in Formula One before jumping to IndyCar. "It was a tough, tough race, but Helio really drives fair so I can trust him. Fantastic race. Hopefully the crowd enjoyed it."
Sato was mobbed by his euphoric Andretti Autosport crew and team mates as he pulled into Victory Lane, kissed by the Indy 500 Queen and then chugged from the traditional bottle of milk before dumping it over his head. At the same time the 42-year-old Castroneves slumped in his cockpit, his hands clutching his head after failing to join AJ Foyt, Al Unser Sr. and Rick Mears as the only four-time winners of the 'Greatest Spectacle in Racing.'
"Finishing second really sucks so close to getting my fourth," said Castroneves. "I'm really trying, I will not give up this dream and I know it is going to happen."
Twice Formula One world champion Alonso, who skipped the Monaco Grand Prix to make his IndyCar debut, led for 27 laps and looked ready to earn a fairytale victory until he suffered a familiar fate when his Honda engine expired with 21 laps to go. It was a case of deja vu for Alonso, who came to the Indy 500 partly to escape the engine problems plaguing his McLaren Formula One team and chase a second jewel in motor racing's Triple Crown.
Overall it was an impressive display by Alonso who until this month had never driven an IndyCar or raced on an oval. The Spaniard's controlled and polished performance won him the respect of the nearly 300,000 spectators at the Brickyard who gave him a rousing standing ovation as his McLaren Andretti Autosport Honda, sporting McLaren's iconic papaya orange livery, slowed to a stop on the home straightaway.
"I came here basically to challenge myself, prove myself," said Alonso, who closed his news conference by chugging on a small carton of milk to much laughter.
"I know I can be as quick as anyone in a Formula One car but I didn't know if I could be as quick as anyone in an IndyCar. It was nice to have this competitive feeling."
After a clean start to the 33-car race, pole sitter Scott Dixon collided with Jay Howard in a terrifying incident that ended both of their races. Howard's car hit the outside wall on lap 53 then slid into the path of Dixon, whose car launched into the air and onto the inside wall, disintegrating as it pierced the safety fencing before being flung back out onto the track. Despite the violent crash that brought out the red flag and halted the race for nearly 30 minutes, both drivers climbed out of their wrecked cars unhurt.
(Editing by Frank Pingue)