Rookie Tora Takagi was fifth, less than 2 seconds behind the winner.
Andretti, making his last start as a driver, had another in a long list of Indy disappointments for his famous racing family. His father, Mario, won Indy in 1969 and spent 24 years trying in vain to do it again.
For Michael Andretti, this was his 13th try and he wound up coasting to the pit lane after 94 laps with a broken piece in the throttle, which cut engine power.
Andretti led 28 laps, making his Indy total 426, the most by any non-winner.
"It wasn't meant to be," he said. "The car was running very good, and we were running at the top all day. At least I can say I had a good shot at winning my last race."
Wheldon and Robby Gordon also were driving for the new Andretti Green Racing team, but Wheldon wound up 19th and Gordon 27th after a gearbox failure.
Gordon completed 169 laps and immediately left for Concord, North Carolina, to drive in the NASCAR's Coca-Cola 600 later in the day.
"It would have been a lot easier to run 600 miles tonight ... with a better finish," said Gordon, who was attempting "The Double" for the fourth time.
Two-time winner Al Unser Jr. ran in the top 10 most of the day and wound up ninth, the last driver on the lead lap.
The race, the first 805km test for the all-new Toyota, Honda and Chevrolet engines mandated by the Indy Racing league for 2003, was marred by blown engines and crashes.
Among those who had engine failures were 1996 Indy winner Buddy Lazier, two-time defending IROL champion Sam Hornish Jr., Jimmy Vasser, Robbie Buhl, Billy Boat, Sarah Fisher and Felipe Giaffone.
Toyota won the battle, powering de Ferran's G Force to the victory for the Japanese company's first Indy win.
Castroneves led the first 16 laps before pitting under a caution flag that was brought out when Fisher, the only woman in the field, ran through the fluids from her own blown engine and slammed into the wall.
Indy rookie Scott Dixon took the top spot and led until he ran out of fuel on lap 31, giving the top spot for the first time to Andretti.
The lead changed hands several times the rest of the way before the battle eventually boiled down to the two Penske drivers.
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