He was airlifted to University Medical Center but was pronounced dead from what Indycar boss Randy Bernard described as ‘unsurvivable injuries’.
The race was abandoned and the drivers not involved in the accident completed a five-lap parade in Wheldon’s memory.
Sunday’s race marked only the third race start of the season for Wheldon, who has struggled to find a full-time drive but claimed a fairytale win in the Indianapolis 500 in May.
Scottish racer Dario Franchitti, who was declared Indycar champion because the race was abandoned, paid tribute to Wheldon: "We put so much pressure on ourselves to win races and championships, it's what we love to do, it's what we live for, and then on days like today it doesn't really matter.
"We lost a good friend, everyone in the IZOD IndyCar Series considered Dan a friend. He was just one of those special, special people.”
Jenson Button, who raced against Wheldon in the formative years of their careers, said on Twitter: “I have so many good memories of racing with Dan in the early 1990s, a true fighter. We’ve lost a legend in our sport but also a great guy.”
Wheldon started racing in the traditional junior British single-seater classes, but his career took off when he switched to America, where he felt there were more opportunities for young drivers.
After successful spells in the US Formula 2000, Toyota Atlantic and Indy Lights single-seater championships, he got his IndyCar break with Panther Racing in 2002.
He switched to Michael Andretti’s frontrunning team for 2003 and scored his first win a year later. In 2005 he won his first Indianpolis 500 and also claimed the overall series title.
A switch to Chip Ganassi Racing ensued, and he only lost the 2006 championship to US racer Sam Hornish Jr on a tiebreak.
After two more seasons with Ganassi, he switched back to the small Panther Racing operation for 2009. The team didn’t have the resources to match the big outfits, although Wheldon finished a stellar second in that year’s Indy 500.
After a winless 2010 he split with Panther, and was left on the sidelines for this season. After his win at Indy, he had pieced together a deal for the final two events of the year at Kentucky, which he finished 14th, and Las Vegas.
His death cast a somber cloud over the final race of the IndyCar season, although the race organisers have already faced criticism for allowing 34 cars to race on such a tight, fast oval circuit.
Wheldon had recently been involved in the testing of the new-for-2012 IndyCar chassis design, which has been created to reduce the possibility of cars touching wheels and getting launched into the air.
Wheldon is survived by his wife, Susie, two young sons, his parents, Clive and Susie, and three siblings.