The 80th Indianapolis 500 was held at the Indianapolis Motor Speedway in Speedway, Indiana on Sunday, May 26, 1996. This was the first Indy 500 contested as part of the new Indy Racing League, under the overall sanctioning umbrella of USAC. It was the third and final race of the 1996 IRL season. Veteran driver and former AIS champion Buddy Lazier won the race, his first career victory in top-level Indy car competition. Lazier's victory came just over two months after he suffered a broken back in a crash at Phoenix.

The 1996 Indy Racing League was the first season in the history of the series, which was created and announced on March 11, 1994 by the Indianapolis Motor Speedway, as a supplementary Indy-car series to the established Indy Car World Series sanctioned by Championship Auto Racing Teams (CART) since 1979. It consisted of only three races, as the season concluded with the 80th Indianapolis 500 in May. Walt Disney World Speedway was completed in time to host the first ever event of the Indy Racing League (IRL), and Phoenix International Raceway switched alliances from CART to the IRL, in order to host the second event of the season. At the conclusion of the three-race schedule, Scott Sharp and Buzz Calkins ended up tied for first place in the season championship. With no tiebreaker rule in place, the two drivers were declared co-champions. Its creation, and the opposition of Indy Car's teams and drivers to take part in it, marked the start of 'the Split', a 12-year period of competition between rival series at the top level of American Open Wheel racing that had lasting negative effects in the sport.