Castroneves also won in 2001 and 2002
Brazilian Helio Castroneves became the sixth driver to claim a hat-trick of Indy 500 wins with victory in the 2009 running of the prestigious race.
The 34-year-old pulled away over the final laps to finish ahead of Britain's 2005 champion Dan Wheldon.
Third-placed Danica Patrick claimed the best-ever Indy 500 finish by a woman.
Scotland's 2007 winner Dario Franchitti, who started on the front row after qualifying third fastest, came home in seventh place.
Castroneves was competing in only his third race since being acquitted of tax evasion charges and was understandably emotional afterwards.
"This is incredible," said Castroneves, who struggled with gearbox issues on pit stops but proved unbeatable over 200 laps. "It feels so great to have my life back. I think my tears speak for everything.
His chance to get back in a race car was like winning the biggest race of his life and this really was the biggest race
Team owner Roger Penske on Castroneves
"You guys (race fans) don't understand, you guys kept me strong. I'm honoured to have fans like you."
The celebrations were in sharp contrast to those just a few months ago when Castroneves was charged with six counts of tax evasion and one count of conspiracy to defraud the US government.
Cleared of all charges, Castroneves returned to the circuit at the Long Beach grand prix and was quickly back in his stride, dominating the build-up to the 93rd Indy 500 - claiming pole and posting the fastest time in final practice.
He carried that momentum into Sunday's race, leading the first three laps before slipping back and biding his time before powering his Penske Dallara Honda back to the front.
Crashes took out some of the biggest names in the field, such as Tony Kanaan, Marco Andretti and Graham Rahal, and Castroneves took advantage when Brazilians Vitor Meira and Raphael Matos collided on lap 173.
The lengthy caution period ensured that everyone had enough fuel to get to the finish and when the race restarted with 17 laps to go, Castroneves got the jump on Wheldon and Patrick to win by nearly two seconds.
"Once I got in the front, it was never look back," added Castroneves. "What a day. This place is magical."
The victory gives the Roger Penske Racing Team a record 15th Indy 500 title and the team owner said: "His chance to get back in a race car was like winning the biggest race of his life and this really was the biggest race."