Billy Olson regained the world indoor best in the pole vault last night, clearing 19 feet 5 3/4 inches in the Vitalis-U.S. Olympic Invitational track and field meet at the Meadowlands Arena in East Rutherford, N.J., hours after Sergei Bubka had raised the mark in Moscow.

And in a dual meet against Hungary in Cosford, England, Zola Budd of Britain set a world indoor best of 8 minutes 39.79 seconds in the women's 3,000 meters. The barefoot runner, 19, cut more than two seconds off the 8:42.30 set by Olga Bondarenko of the Soviet Union.

Olson's effort was the seventh time this season the world best has been broken. The sixth was the 19-5 by Bubka of the Soviet Union on his first try earlier yesterday.

Olson raised the best to 19-2 3/4 on Dec. 28 at Saskatoon, Saskatchewan. Bubka improved it to 19-3 on Jan. 15. Olson went 19-3 1/4 on Jan. 17 at Los Angeles and 19-3 3/4 on Jan. 25 at Albuquerque.

Between Olson's 19-3 3/4 and Bubka's 19-5, Joe Dial cleared 19-4 3/4 on Feb. 1 at Columbia, Mo.

Bubka holds the world outdoor record of 19-8, set last July in Paris.

Evelyn Ashford, the 1984 Olympic champion in the women's 100 meters, made a triumphant return to competition in the U.S. meet, winning the 55-meter dash, and Diane Dixon set an American record in the 400 meters.

Ashford won in 6.68 seconds, .02 ahead of Merlene Ottey-Page. Ashford had last competed Aug. 31, 1984, taking time off to prepare for the birth of her first child. Her daughter, Raina, was born last May, and Ashford carried her on a victory lap in Byrne Arena.

Dixon was timed in 52.13 seconds, improving on the 52.20 she ran a year ago in New York.

Ireland's Marcus O'Sullivan, who ended countryman Eamonn Coghlan's 15-race winning streak in the mile last month at Los Angeles, beat him convincingly in New Jersey, in 3:57.33. Abdi Bile Abdi, a Somalian attending George Mason University, was second in 3:58.23.

Coghlan, still showing effects of an intestinal virus that has slowed him throughout the year, came in fourth, in 4:01.52, behind U.S. Olympian Jim Spivey, 4:01.26, and ahead of American-record holder Steve Scott, 4:02.99.

The men's 55 meters, won by Ben Johnson of Canada in a meet-record 6.05, went off without Olympic quadruple gold medalist Carl Lewis, who pulled out upon discovering he would have to run a qualifying heat.

But Lewis was busy enough. Lewis won the long jump at 27-5 1/2, well off his world indoor best but good enough to extend his winning streak to 45 in the event, indoors and outdoors. And he did run in a special 55 meters, placing third, behind Lee McRae. And sang the national anthem and did commentary for superstation WTBS.

Dennis Lewis won the high jump at 7-6 1/2. U.S.-record holder Jimmy Howard, previously undefeated this season, also cleared 7-6 1/2, but Lewis had fewer misses.

Georgetown University won its section of the men's 4x100-meter relay in 3:16.01. Patrick Mann, a graduate of Gar-Field High School in Woodbridge, Va., anchored teammates Ashley Ward, Darren Outler and Phil Fransha. Howard's Neil Madison, John Branch, Lonne Johnson and Don Battle won their section in 3:19:25.

Other area finishes:

George Mason's Ibrahim Okash fourth in the 800 meters in 1:49.17; Georgetown's Miles Irish fifth in the 1,000 in 2:21.79; Howard's Brenda Bailey and Teresa Allen fifth and sixth in the women's long jump, and Raymond Humphrey of Georgetown sixth in the men's long jump.

Budd, who holds the outdoor world record in the women's 5,000, took the lead at the first turn in the 3,000 of the English meet and ran away from her three rivals. Cheered on by the crowd, she had a 50-meter lead by midrace.

Sebastian Coe easily won the men's 1,500, in an unremarkable 3:45.65. In the long jump, Britain's Robert Emmiyan broke the longest-standing European indoor record, Igor Ter-Ovanesyan's 27 feet in 1966, with a leap of 27-4 1/2.