The organisation was founded by former IndyCar driver Sam Schmidt in 2001, fourteen months after a practice crash at the Walt Disney World Speedway on 6 January 2000 left him a quadriplegic following severe spinal cord injury at the C-3/C-4 levels. Schmidt built the team into a competitive IndyCar and Indy Lights programme over the following decade, recruiting fellow ex-driver Davey Hamilton as a co-owner in 2012 to form Schmidt Hamilton Motorsports, and adding Canadian businessman Ric Peterson's stake in 2013 to create Schmidt Peterson Motorsports.
In the Schmidt Peterson era the team scored seven IndyCar victories. Simon Pagenaud won at Detroit Round 2 and Baltimore in 2013, and at the inaugural GP of Indianapolis in 2014 before departing for Team Penske. James Hinchcliffe won at the 2015 Indy Grand Prix of Louisiana and at Long Beach in 2017. The team also scored consistent Indy Lights success, producing champions Thiago Medeiros (2004), Jay Howard (2006), Alex Lloyd (2007), Jean-Karl Vernay (2010), Tristan Vautier (2012), and Sage Karam (2013).
Arrow Electronics became title sponsor in 2019, rebranding the team Arrow Schmidt Peterson Motorsports for that season. Marcus Ericsson joined the lineup alongside an injured James Hinchcliffe, with both Hinchcliffe and Ericsson departing at season end. In August 2019, McLaren Racing announced a partnership agreement for 2020 onwards, with the combined entity named Arrow McLaren SP.
Pato O'Ward and Oliver Askew drove for the team in 2020, a season disrupted by the COVID-19 pandemic. Askew was released at the end of the year and replaced by Felix Rosenqvist for 2021.
The 2021 season marked the Arrow McLaren SP era's competitive highpoint. O'Ward took his first IndyCar victory at Texas Motor Speedway, making the team the first Chevrolet-powered entry other than Team Penske to win an IndyCar race since 2016, and also McLaren's first open-wheel racing win since 2012. O'Ward added a second win at Detroit Race 2 — the team's first road or street course victory since 2017 and the first two-win season since 2014. For the 105th Indianapolis 500 the team expanded to three cars, with Juan Pablo Montoya in the third entry. Kevin Magnussen substituted for Rosenqvist at Road America after Rosenqvist was injured at Detroit. On 8 August 2021, McLaren announced the purchase of a 75% ownership stake, with CEO Zak Brown installed as chairman; Schmidt and Peterson retained the remaining 25% through 2024.
In 2022, O'Ward and Rosenqvist both returned. Juan Pablo Montoya made part-time Indy 500 appearances again in the No. 6. The team recorded its best Indianapolis 500 result to that date, with O'Ward finishing second and Rosenqvist fourth. Alexander Rossi was announced as a third full-time driver from 2023.
The SP suffix was dropped for the 2023 season and the team raced as Arrow McLaren IndyCar Team. Rossi joined O'Ward and Rosenqvist, and the team celebrated McLaren's 60th anniversary at the Indianapolis 500 with special liveries paying tribute to the McLaren M16C/D (1974 Indy winner), the McLaren MP4/2 (1984 Monaco Grand Prix winner), and the McLaren F1 GTR (1995 Le Mans winner), honouring McLaren's Triple Crown achievements. In January 2025, McLaren completed the acquisition of Schmidt and Peterson's remaining 25% stake, making the organisation fully McLaren-owned.
In 2026, Arrow McLaren opened the McLaren Racing Center in Indianapolis, a renovated facility costing approximately 30 million dollars that expanded the team's footprint from around 33,000 square feet to approximately 86,000 square feet, accommodating 12 dedicated car bays, indoor hauler parking, a pit-stop practice area, and an integrated gym and recovery facility.
During the 2020–2022 Arrow McLaren SP years the team fielded Pato O'Ward, Oliver Askew, Felix Rosenqvist, and Juan Pablo Montoya, with Kevin Magnussen and Oliver Askew as substitutes. O'Ward remained the team's lead driver and its primary race winner through this period.
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