Robby Gordon was second in the Old Spice Prelude to the Dream, followed by Clint Bowyer.
Stewart grabbed the lead from Kevin Harvick on the first lap at Eldora Speedway and led the rest of the way in the 30-lap race.
Gordon moved into second by the 20th lap, but couldn't close.
After the victory, Stewart raised his arms to the cheers of the crowd and then climbed to the top on the chain-link fence that separated the fans from the track.
"This is a new car, a little different design than what we've had in the past," Stewart said. "This thing was just easy to drive. It didn't take skill on my part. The car was just that good. It made it easy."
Stewart applauded Gordon's effort.
"I told him for years I thought he would be great in a dirt car," Stewart said. "I think he's one of the most naturally talented drivers that races every week in the Sprint Cup series. I'm proud of it (Gordon's performance) because it makes me look like a genius."
Coming so close to winning the race last year is one thing that brought Kyle Busch back for another try.
The NASCAR Sprint Cup points leader finished second in the 2007 Prelude to the Dream, edged out by winner Carl Edwards
-- by 0.3 seconds -- and finishing just ahead of Jeff Gordon.
He was among the 25 drivers who competed in the contest Wednesday evening.
"We're back for more," Busch said. "Finishing second and being so close
-- that was obviously the first thing, to try to come back and win. Not only that but just the fun."
Busch ended up finishing 10th.
Organizers weren't counting on the 3 inches of rain Tuesday night and Wednesday morning that turned the track into a sea of mud. But sunny afternoon skies and some soil-packing tractor work made the track raceworthy.
"It's probably going to be pretty tacky once it gets wore in, and it's going to be pretty fast," Busch said. "I don't presume it drying out that much and laying any rubber down and getting dusty and all."
Edwards said he was told this year's car is better than the one he had last year.
"I think that's going to be necessary," he said. "I don't think it's going to be an easy race to win."
Edwards said the race is an opportunity to escape the pressures of the NASCAR circuit and for fellow racers to do something together in raising money for a charity instead of strictly competing against each other.
"The truth is, they're my mortal enemies on Sunday," he said.
And Edwards acknowledged that it's difficult to keep competitive juices from flowing.
"The only bad thing about coming back this year is that unless I win, it's going to be a huge letdown for me and all the people who came with me," he said with a laugh. "Everybody wants to win this thing just so you can say:
'Hey, I won the dirt race against all the guys.'"
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Edwards had to leave the race when his engine overheated. He finished 18th.
The race on Eldora's half-mile, high-banked oval track that seats nearly 18,000 featured 25 drivers, including Edwards, Stewart, Gordon, Jimmie Johnson, Denny Hamlin and Harvick. The 54-year-old track, carved out of farmland, was purchased by Stewart in 2004.
Proceeds from the race will go to support the Tony Stewart Foundation and the construction of a second Victory Junction Gang Camp, in Kansas City, for children with life-threatening health issues.
"The Prelude has taken on a life of its own when guys are building their own cars to come run for one night, and that's because they're having so much fun doing it that they want to have their own equipment," Stewart said.
In dirt-track racing, drivers have to steer right for the car to go left. Going through turns, the front left tire comes off the track and the left rear tire provides traction.
The cars weigh about 2,300 pounds, supply 800-plus horsepower and, at Eldora, reach top speeds of about 150 mph. The vehicles have two-speed transmissions and no windshields
-- only short plastic shields to protect drivers from rocks.
"There's a lot going on when you're out there, flipping it sideways and tossing it around and trying to get a good lap and not trying to hit anybody," Busch said.
The fans seemed to be having as much fun as the drivers.
Russ Scheler, 57, and his wife drove 10 hours from their home in Douglasville, Pa., to see the race after hearing about it from fellow church members. Scheler said he prefers dirt-track racing to the asphalt NASCAR variety.
"There's more action," he said.
Chris Hall brought his wife, Leah, to the race as a birthday present to her. The couple, from Medina in northeast Ohio, saw the race for the first time last year.
"I fell in love instantly," she said. "It's total excitement on every lap."
She said the race has a "hometowny feel."
"We're out in the parking lot talking to total strangers," she said.
[Associated Press; By JAMES HANNAH]
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