The 2008 race winner will start the Indy 500 from pole position for the fifth time next weekend after setting the second-fastest four-lap qualifying run in the event's history, a 234.046mph (376.661km/h), and the very fastest to clinch pole.
Chip Ganassi Racing team-mates Dixon and Palou were provisionally onto the front row, split by Ed Carpenter Racing's Rinus VeeKay, after the Fast 12, before Palou set a four-lap average speed of 233.499mph (375.780km/h) in the Fast Six.
When VeeKay could not go faster, Ganassi was guaranteed pole, although whether that would be for Car #10 or Car #9 remained an open question.
“There was not a lot of nerves,” laughed Palou.
“Like, I knew he was going to get it, everybody knew; he's the man here.”
Until Dixon's run, Palou had been the only driver to lap above 234mph in the Fast Six, with VeeKay churning out a string of 233s for a 233.385mph (375.597km/h) average in the #21 Chevrolet.
However, ‘The Iceman' was first to complete two laps in the 234s, kicking things off with a 234.437mph (377.290km/h) and 234.162mph (376.847km/h), then finishing with a 233.859mph (376.360km/h) and a 233.726mph (376.146km/h).
VeeKay remarked, “It's unique about Indy 500 qualifying [to watch rivals' laps] and I think really after my run and knowing Scott was going to go out, I expected him to improve my time.
“Seeing his first lap, I knew it was going to be very, very hard for him to make a mistake and qualify behind me.”
Palou added, “I agree. I guess it would be different if there was another behind, but when it's Scott Dixon, maybe you are a bit more scared.
“Obviously, seeing that number, it was amazing.
“I thought my four-lap run was fast but we were not fast enough, [but] it's okay.”
Ganassi got four of its five cars through to the Fast Six, with Marcus Ericsson qualifying fifth and Tony Kanaan sixth, while Indy 500 rookie Jimmie Johnson put its #48 entry 12th on the grid after also making Pole Day at the Brickyard.
All 33 drivers in the field are back on track tomorrow for Practice 8, a two-hour session kicking off at 03:00 AEST.
Stan Sport will carry live and ad-free coverage of next weekend's race on Monday from 01:00 AEST.