Following the 1991 CART season, Bobby Rahal left the Galles-Kraco Racing team. Despite consistent top finishes, Rahal won only two races from 1989–1991. Likewise, Danny Sullivan left the Patrick Racing team, following a dismal season with the Alfa Romeo engine. The two drivers essentially swapped rides. Sullivan joined Galles, and Rahal signed with Patrick in September 1991.

By the winter of 1991, however, Patrick Racing started to collapse due to financial and legal issues regarding the Alfa Romeo engine. Ilmor had refused to supply the Chevy/A engine to Patrick due to rumors that one of the Chevrolet Indy car engines had been provided to Alfa-Romeo.

To ensure that Rahal would not be racing an uncompetitive engine in 1992, Patrick sold his assets to Rahal and new partner Carl Hogan, who was able to secure a supply of Chevy engines. A new team was formed, known as Rahal/Hogan Racing, with key personnel from Patrick Racing, such as team manager Jim McGee, moving over to the new organization.

In 1992, the team won the IndyCar World Series title on their first try, with owner-driver Bobby Rahal driving a Lola T92/00 to 4 victories during the season.