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LEXINGTON, Ohio -- Pato O'Ward bounced back on multiple levels with an IndyCar victory Sunday he was confident of achieving with a new hybrid engine he found to his liking.

The combination helped him reduce a big time deficit to Álex Palou and ultimately pounce on the slimmest window of opportunity.

O'Ward seized the lead with 24 laps remaining as Palou stalled in the pits and held on to win the Indy 200 at Mid-Ohio Sports Car Course in the IndyCar series' official debut of its hybrid engine.

The victory provided huge redemption for O'Ward, who was leading the final lap of the Indianapolis 500 in May before Josef Newgarden overtook him on the final half-mile for the victory. It was O'Ward's second win this season but the first on-track after he was awarded the victory in the season-opening race at St. Peterburg, Florida, when Newgarden was disqualified for manipulating the push-to-pass system on his Chevy.

That made the win even more rewarding, especially after the heartbreaking loss at Indy.

"We really pushed today," said O'Ward, whose initial pit stop for softer, red-sidewall alternate tires helped him gain speed before switching back to primary rubber on the next. "I was pushing so long and watching him pull out kind of trying to run away with it in the first stint, I said 'no way, no way.'"

"As soon as we got the reds on, that was my chance to close the gap and ultimately beat him. ... We earned it. No one gave it to us. This feels really good."

O'Ward started second in a Chevy to Palou's Honda and spent most of the race whacking a time gap of more than five seconds at times to the dominant Palou, who edged his counterpart by 0.0024 seconds for the pole and had sought his second consecutive win at Mid-Ohio. His chance came when Palou pitted for tires and fuel on Lap 56 of 80 but stalled, a hiccup that allowed O'Ward to slip by as Palou re-entered the repaved road course.

"Just tried to engage first gear too early," said Palou, who was coming off a Laguna Seca win from the pole two weeks ago. "My mechanics were super good on tires and a few -- like you cannot engage first gear when the fueler is in, so yeah, I just tried and it got denied and then when I could have put it (in gear), it was like half a second or one second. Totally my fault."

Palou stalked O'Ward from there but couldn't get within range to pass. Green-flag conditions also helped, even after Romain Grosjean's Chevy spun behind them and stalled with three laps left. Grosjean refired the new hybrid unit and continued, preventing a disruption and likely finish under caution with the previous engine.

O'Ward wobbled slightly near the end but took the victory by 0.4993 seconds, giving the driver his first on-track win since July 2022 at Iowa and Arrow McLaren a big triumph in a season dominated by Team Penske and Chip Ganassi Racing. It was IndyCar's closest finish this season on a road or street course.

Scott McLaughlin was third in a Penske Chevy, followed by Colton Herta and Marcus Ericsson in Andretti Global Honda and Alexander Rossi, O'Ward's teammate.

Palou extended his IndyCar points lead to 48 over Will Power, while O'Ward surged to third, 70 back.

Six-time race winner Scott Dixon started 21 laps down because his Honda failed to start and fell 71 points back to fourth after entering the weekend 32 behind Palou in third. Dixon already had a lot of ground to make up on Sunday after qualifying 14th.

While the finish was obviously important for O'Ward and Palou, attention was focused on the first competition with the hybrid unit powering the Hondas and Chevys.

The long-awaited hybrid unit in the 2.2-liter, twin-turbocharged V-6 engine produces electricity through braking or throttle position change. Power is stored in capacitors that produce quick boosts and when drivers deploy a system similar to the push-to-pass button. The combination can add up to 120 horsepower and more than 800 total.

IndyCar expressed encouragement and excitement about the hybrid engine in a statement after the race that cited the collaboration between Chevy and Honda. The statement added that the series looked forward to "the continued evolution of the hybrid power unit as teams and drivers fine-tune the system" and how horsepower assist works on an oval next weekend at Iowa Speedway.

At Mid-Ohio, O'Ward and Palou stood above everybody else in claiming the front row before O'Ward made it pay off.

IndyCar's next race is July 14 at Newton, Iowa.