Bettenhausen began his racing career in 1964, competing in street stocks at a track in Tinley Park, Illinois. His first sprint car race was in 1968 at the Iowa State Fairgrounds, where he crashed out of the consolation race. Later that year, he won his first USAC midget car race at Indianapolis Raceway Park for car owner Ed Loniewski. He went on to win eight career National Midget feature events. Merle captured the World Midget Championship in New Zealand in both 1970 and 1971. In 1974, he received USAC's Jim Blunk Memorial Sportsmanship Award.
Bettenhausen's USAC Champ Car career was brief. He made his first two Indy Car starts in 1970, finishing 8th at the Illinois State Fairgrounds Mile and 7th at the Sacramento Mile. He was named the 1971 Hoosier Hundred Rookie of the Year for his 10th place result at the Indiana State Fairgrounds. In 1972, he failed to qualify for the Indianapolis 500 after crashing in practice. Three or four laps into his first Champ Car race on a paved track, at Michigan International Speedway on July 16, 1972, he tangled with Mike Hiss and struck the outside wall. The car exploded in flames, and as Bettenhausen attempted to climb free while the car was still moving, his right arm became trapped between the car and the wall and was torn off above the elbow. He also suffered extensive burns to his face and spent two months at the University of Michigan Hospital in Ann Arbor.
Despite losing his right arm, Bettenhausen vowed to race again and continued to compete in dirt events, particularly driving midget cars in the USAC championship. He used a prosthetic arm fitted with a hook appendage to grip the steering wheel. He returned to the cockpit of a USAC National Midget in June 1973, 11 months after his accident. In his 14th race back, on August 31, 1973, he won a USAC National Midget feature at Johnson City, Tennessee's Sportsman Speedway, driving the final 37 laps without power steering. He finished the 1973 USAC midget season 16th in points with one win. He continued to race through the 1974 season, ranking second in USAC National Midget points entering July.
Bettenhausen retired from racing in July 1974 at the age of 31. He cited the recent birth of his daughter and a severe crash his older brother Gary had suffered at Syracuse, which paralyzed Gary's left arm. Merle stated he had been contemplating quitting for several weeks prior to Gary's accident. After retiring, Bettenhausen remained connected to racing. He started a business selling fuel and tires at sprint and midget races across the United States. He later worked for his brother Tony Jr.'s team, Bettenhausen Racing, which competed in CART. He also worked in the retail automobile business in Indianapolis and in advertising for an Indianapolis-based business. In 1974, he was appointed to the Indiana Youth Council by Indiana Governor Otis R. Bowen. He had a son, Ryan Bettenhausen, and a daughter, Tracy Jennings.
Bettenhausen suffered a massive stroke in early April 2026 and died on April 29, 2026, at the age of 82. He was born on June 9, 1943, in Tinley Park, Illinois, and died in Indianapolis, Indiana.
This article is based solely on the supplied corpus. No external sources were consulted; claims that could not be substantiated against the corpus were omitted under the drop-the-claim rule.