In 1998, Lazier returned with Hemelgarn Racing to drive the No. 91 Dallara IR8-Oldsmobile. At the season-opening Indy 200 at Walt Disney World, Lazier started in 8th place after qualifying was rained out. In the race, Lazier led for 34 laps, but crashed out while attempting to lap Stéphan Grégoire in turn 2. At the following race, the Dura Lube 200 at Phoenix, Lazier started in 9th place but retired due to an engine failure after 9 laps. At the Indianapolis 500, Lazier qualified in 11th place. In the race Lazier ran in the top five and battled with Billy Boat, Kenny Bräck, Luyendyk, Greg Ray, John Paul Jr. and Eddie Cheever for the lead. In the final 20 laps, Cheever and Lazier were the main contenders. Lazier closed to within 1.1 seconds of Cheever, and despite a late-race caution due to Marco Greco's car smoking, Cheever led Lazier home at the finish.