The Swede extracted a flying lap of 1m45.1519s in the final seconds of qualifying to climb to the top of the leaderboard at the 4.014-mile, 14-turn natural terrain road course in Elkhart Lake, Wisconsin.
Andretti Global’s Colton Herta, last year’s pole-sitter at Road America, ended up second at 0.1394s behind.
Marcus Armstrong made it two Chip Ganassi Racing drivers in the top three, putting down a lap that was 0.5073s off in third.
Kyle Kirkwood managed to put the No. 27 Andretti Global Honda in fourth, with Team Penske’s Josef Newgarden in fifth after suffering a vicious hit in the final round of qualifying.
Will Power began the miserable round for Team Penske, spinning in Turn 5 and causing a red flag, which negated a chance to fight for pole.
Fast Six qualifying
Herta began the switch for drivers going from wet tires to the softer alternate slick compound to start the segment, charging to an initial quick lap of 1m57.2604s on the ever-drying track.
After Newgarden crossed the line at 2m00.9985s lap, with he and Herta the only drivers to log a time, Power brought out the red flag with under six minutes to go after spinning and stalling out in Turn 12.
When the segment resumed, it was Armstrong delivering a stout lap of 1m47.9501s to dethrone Herta, temporarily. Herta responded with a 1m47.6837s flyer to return the favor and bump Armstrong to second.
The top spot rotated between Kirkwood, Armstrong and then Lundqvist in the final seconds, but Herta was still on track lurking.
However, everything ended abruptly after Newgarden dropped a wheel off entering The Kink, spinning around and pounding violently – first with the right rear and then the right sidepod – into the SAFER Barrier.
The shunt concluded the session and handed Lundqvist the pole.
Top 12 qualifying
Although Armstrong led most of the segment with a 2m00.3687s lap, the spot changed hands with less than a minute to go when Herta delivered a 1m59.2088s flyer.
Herta was followed by Kirkwood, who was 0.3285s behind to end up second. Armstrong tried to respond and improved his time, but came away third at 0.3861s behind Herta.
Power was fourth. The fifth spot went to Lundqvist, who bumped team-mate Alex Palou, the defending race winner, out of transferring into the Fast Six in the final seconds. Newgarden was sixth from Palou and Team Penske’s Scott McLaughlin.
Alexander Rossi (Arrow McLaren) was ninth, ahead of championship leader Scott Dixon (Chip Ganassi Racing) in 10th.
Group Stage qualifying
In Group 1, Rossi vaulted to the top in the final minute with a 2m00.9811s flyer, ahead of O’Ward in second.
Armstrong, who led the group for a majority, was knocked down to third with Newgarden in fourth and Power in fifth.
The final transfer spot went to Simpson, who delivered a late run of 2m019470s to knock out Christian Lundgaard, who ran a 2m02.3826s lap in the No. 45 Rahal Letterman Lanigan Racing Honda.
Andretti Global’s Marcus Ericsson was also on the outside looking in, ending up eighth in the group.
Rinus VeeKay (Ed Carpenter Racing) and Santino Ferrucci (AJ Foyt Racing) were ninth and 10th, respectively.
Nolan Siegel, who was called to substitute for Agustin Canapino in the No. 78 Juncos Hollinger Racing Chevrolet, put in a respectable effort in 11th.
Dale Coyne Racing’s Luca Ghiotto, making his third career IndyCar start, was 12th, ahead of Pietro Fittipaldi (Rahal Letterman Lanigan Racing).
In Group 2, it was Herta pulling out the late heroics by throttling to a lap of 2m00.3275s to go to the top at the checkered flag.
Palou set a 2m00.5789s lap, which left him second at 0.2514s behind Herta.
McLaughlin, Kirkwood and Dixon transferred into the next round in third, fourth and fifth, respectively.
Lundqvist climbed into the final transfer spot in sixth, bettering Juncos Hollinger Racing’s Romain Grosjean by 0.3497s.
Rookie Christian Rasmussen (Ed Carpenter Racing) was eighth, ahead of fellow first-year driver Theo Pourchaire (Arrow McLaren) in ninth.
Jack Harvey (Dale Coyne Racing) was 10th, with Felix Rosenqvist (Meyer Shank Racing) coming across 11th.
Graham Rahal (Rahal Letterman Lanigan Racing) ended up 12th, ahead of Sting Ray Robb (AJ Foyt Racing) in 13th.
Helio Castroneves, who brought out the only red flag after stalling in Turn 5 with three minutes left, put the Meyer Shank Racing Honda in 14th.