When his colt was led into the auction ring at the Keeneland Yearling Sales Tuesday night, Tom Gentry knew that the next minute was going to be his most important 60 seconds of 1979.

Gentry breeds and sells horses for a living, and each year he sees the success or failure of his business determined on one July evening in Lexington, Ky. He had nine yearlings in the sale Tuesday, but the son of Hoist The Flag in the ring now was his big one. Gentry knows that the fortunes of the yearling market are crazy and unpredictable but he was hoping that this colt might bring him somewhere around $400.000.

The auctioneer delivered a brief sales pitch, opened the bidding, began his rapid-fire chant and almost before Gentry knew what had happened the price had soared to $1 million. Sellers of yearlings are supposed to display poker-faced composure at such crucial moments but Gentry said, "There wasn't and restraint from this corner. I was floating three feet above my seat."

While he was floating, Gentry saw that his colt was the object of an international bidding war between Japanese and British interests. After the million-dollar mark, they increase the bidding in small increments (if you consider $50,000 sumps small).

"I had plenty of time to savor it," Gentry said.

When the auctioneer's gavel finally banged down, the Japanese had won the bidding, and Tom Gentry had sold the most expensive thoroughbred yearling in history -- for $1.6 million.

The scion of a prominent racing family, Gentry sold his first yearling in 1964 and very quickly made a reputation as a boy wonder in the breeding business. Over the years he has acquired outstanding mares, gained access to the services of top stallions and established himself as one of the most successful commercial breeders in this country.

Even so, Gentry said, "the pressure is always enormous," because the prices he gets for his horses can be determined by so many unpredictable and irrational factors.

Tuesday night, Gentry had high hopes for a yearling colt by the Stallion Youth, out of an excellent mare. But Youth proved to be an unfashionable sire this season; the colt was small and blocky, a type of conformation that many horsemen dislike, and he was sold near the end of the evening, at a time when buyers already had left the pavilion. He brought only $65,000, far below Gentry's expectations, a testimony to the whimsical nature of the marketplace.

While fortune worked against Gentry in that case, it intervened positively on behalf of the $1.6 million yearling. A few years ago, Gentry spent $60,000 for a mare named Royal Dowry, who already had produced a top stakes winning filly.

In 1977, Gentry bred her to Hoist The Flag, the best stallion available to him. The product of this union was a handsome colt, but even with his good conformation he hardly seemed to have the credentials of a record breaker.

Yearling prices, though are determined by the bidding and the bank-rolls of the buyers as much as the objective worth of the horse.

One of the men interested in Gentry's colt was Robert Sangster, who amassed a fortune operating the English football pools and now runs the most ambitious racing enterprise in the world. He has been the most free spending purchaser of yearlings, and Monday he and various partners bought nine for a total of $4 million. Tuesday they were back for more, and they wanted to buy Gentry's colt.

They were not alone. Two Japanese breeders, Kazuo Nakamura and Yorozy Sugawara, had bought one high-priced yearling at Keeneland last summer and now they intended to buy another. Shortly before the sale began Tuesday night they came back to the stall where the son of Hoist The Flag was residing and asked to take another look.

"They told me he was keedo ii (very good) in the sale," Gentry said. "I believed that means he was number one. I thought they would be bidding, and I thought the British would be bidding, and I thought I was going to be in a little clover."

Even in his most optimistic moments though Gentry could not have imagined how much clover. CAPTION: Picture, This Hoist The Flag colt out of Royal Dowry surprised owner Tom Gentry by bringing a record $1.6 million.