Dixon and Howard came together on the bend and the former's car was sent flying into the air.
Replays showed Howard losing control and going straight into the barrier before bouncing back in front of Dixon's car.
Dixon was sent spinning into the air and his car smashed into the opposite barrier but both drivers appear to be ok.
Debris was left scattered across the track as officials waved the red flag and the race was stopped on lap 55 of the 200 lap race.
Indy 500: Scott Dixon's car is sent flying after colliding with Jay Howard Scott Dixon's horror crash with Jay Howard in the 101st Indy 500 Sun, May 28, 2017
Scott Dixon and Jay Howard were involved in a huge crash during the 101st Indianapolis 500
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Scott Dixon collides with Jay Howard in a spectacular crash at the Indy 500
Thankfully, Dixon's car came down bottom first on the inside wall after being catapulted into the air.
Helio Castroneves was also lucky to avoid being caught up in the crash as he was passing under Dixon's car when it was airborne.
The safety barriers took a battering in the crash and it will take a while for them to be repaired before Indy 500 can get back underway.
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