The 30-year-old Kiwi will lead the 33-car field to the green flag for a three-wide rolling start across 11 rows for the 200-lap, 500-mile race.
In a Penske sweep, its first since 1988, Will Power will start from the middle of the front row, with Josef Newgarden on the outside.
Indy 500 grid: McLaughlin on pole from Power, Newgarden
What happened in Fast Six qualifying?
Last of the drivers to run as the track temperature dropped, McLaughlin also had the benefit of seeing the runs of Newgarden and Power who went before him.
He tore some mighty laps in the mid-234mph bracket to average a record-breaking 234.220mph four-lap average, 0.003mph faster than Alex Palou’s pole speed of last year.
Power lapped 0.199s slower over the four laps, for a 233.917mph average. Newgarden managed 233.808mph, which was 0.2709s off pole.
Alexander Rossi was best of the rest for Arrow McLaren, setting 233.090mph, which was almost a quarter of a second off McLaughlin’s pace. His NASCAR star team-mate Kyle Larson was hugely impressive on his way to fifth at 232.846mph.
Santino Ferrucci was the slowest of the pole contenders, a loose effort resulting in 232.692mph – which was over a second away from P1.
Indy 500 Fast Six qualifying times: McLaughlin takes pole
What happened in Indy 500 Top 12 qualifying?
McLaughlin ripped the 10-mile run around the 2.5-mile oval in 233.492mph, beating Power by 0.0056s – which crucially meant he’d run last in the Fast Six.
Newgarden was third again, on 233.286mph, and was over a tenth off the pace.
Missing the cut were Rinus VeeKay (Ed Carpenter Racing), Pato O’Ward (Arrow McLaren), Felix Rosenqvist (Meyer Shank Racing) and Takuma Sato (Rahal Letterman Lanigan Racing) – which ensured his third top-10 start with three different teams.
Kyle Kirkwood will start just outside the top 10 after being forced to lift on his run with Andretti Global, while Ryan Hunter-Reay worked wonders to make the Fast 12 in the one-off Dreyer and Reinbold entry.
Ryan Hunter-Reay, DRR-CUSICK MOTORSPORTS Chevrolet
Photo by: Phillip Abbott / Motorsport Images
Indy 500 Top 12 qualifying times: McLaughlin fastest
What happened in Indy 500 Day 1 qualifying?
Power was fastest with a speed of 233.758mph, ahead of McLaughlin and Newgarden.
Expected heavy hitters to miss the Top 12 were Andretti Global’s Colton Herta, reigning champion Alex Palou (Chip Ganassi Racing), who will start 13th and 14th respectively.
Four-time Indy 500 winner Helio Castroneves starts 20th for Meyer Shank Racing, one spot ahead of six-time series champion Scott Dixon (CGR). Pietro Fittipaldi (Rahal Letterman Lanigan Racing) was the last of the cars to avoid last-chance qualifying and will start 30th.
Pietro Fittipaldi, Rahal Letterman Lanigan Racing Honda
Photo by: Geoffrey M. Miller / M