Owned by Isabel Dodge Sloane's Brookmeade Stable, the small Sword Dancer was less than impressive racing at age two, winning only three times in fourteen starts. At age three, he began to develop and in the 1959 Kentucky Derby was beaten by a nose by Tomy Lee in a thrilling stretch duel. When Tomy Lee did not compete in the Preakness Stakes, his jockey Bill Shoemaker rode Sword Dancer to a second-place finish behind Royal Orbit, and then to victory in the Belmont Stakes. From there, the colt went on to win a number of major races including a defeat of Hillsdale in the Woodward Stakes. He also defeated 1958 Horse Of The Year, Round Table, for a second time (he was a disappointing third in the Woodward), beating him in the Jockey Club Gold Cup. His performance throughout 1959 earned him Horse of the Year honors, the most prestigious award in all of horseracing.
After a slow start at age four, Sword Dancer came on to win four important races out of his twelve starts. An ankle injury in the Man O' War Stakes ended his racing career and he was retired to stand at stud at Darby Dan Farm. Before being sent later on to a breeding farm in France, Sword Dancer notably sired the Hall of Fame colt, Damascus, and the filly Lady Pitt, the 1966 American Champion Three-Year-Old Filly.
In 1977, Sword Dancer was inducted into the United States' National Museum of Racing and Hall of Fame. His portrait by equine artist Richard Stone Reeves can be seen in the museum's collection.