A win for Stewart would have just about completed his NASCAR resume. The 500 is the only big race missing from a resume that includes wins on all but four Nextel Cup tracks.
The prerace favorite had just regained the lead after falling all the way to 40th when he and Busch collided coming off turn four with 47 laps to go, sending both into the wall.
It appeared Stewart's car got loose on the bottom of the banking and Busch tapped his rear end, turning Stewart sideways.
Kyle Busch, running third at the time, somehow managed to avoid the spinning cars and took the lead, but Martin Truex Jr. eventually pushed ahead of Busch for his first ever Daytona lead with longtime NASCAR star Mark Martin running a close 2nd.
The crash also spoiled the elder Busch's bid to give car owner and 14-time Indianapolis 500 winner Roger Penske his first Daytona 500 victory.