As other automobile builders in the early twentieth century did, the Duesenbergs used the Indianapolis Motor Speedway to test and race their cars. Fred Duesenberg's entries participated in Indianapolis 500-mile auto races between 1912 and his death in 1932. The first Duesenberg appearance at the Indianapolis 500 occurred in 1912, when their Mason Motor Company-owned racecar practiced for the race, but it had a mechanical failure and did not compete. Between 1913 and 1916 the Duesenberg racing team improved its standings in the annual Indianapolis 500. The team took ninth place in the race in 1913. In 1914, Eddie Rickenbacker, a future World War I aviation ace, drove a Duesenberg-powered racecar to a tenth-place finish and US$1,400 in prize money. The team also had a twelfth-place finisher that year. In 1915 the team had another good showing, taking fifth and seventh places. In 1916 it had its best finish to date when rookie driver Wilbur D'Alene finished in second place. With the outbreak of World War I, efforts focused on wartime production and racing at the Indianapolis Motor Speedway went on a two-year hiatus.
On July 2, 1932, while returning to Indianapolis from New York, Fred was driving a Duesenberg passenger car with a prototype, high-powered engine and lost control of it on a wet Lincoln Highway on Ligonier Mountain, about two miles west of Jennerstown, Pennsylvania. Duesenberg's automobile overturned, throwing him from the car. He was expected to fully recover from his injuries (a spinal injury and dislocation of the shoulder). While his wife and son traveled to Pennsylvania to be with him, Duesenberg developed pleural pneumonia. Duesenberg improved after oxygen was administered; however, he suffered a relapse and died on July 26, 1932, at the age of fifty-five. Duesenberg is buried at Crown Hill Cemetery in Indianapolis, Indiana.