There was a gap for five months between the first two Grands Prix of the 1965 season and the annual round of non-championship events resulted in victories for Team Lotus number two Mike Spence at the Race of Champions; for Jim Clark at Syracuse and Goodwood and for BRM's new boy Jackie Stewart at the International Trophy (although Jim Clark and Dan Gurney were in America and did not take part). Monaco fell on the same weekend as the Indianapolis 500 and as a result neither Clark nor Gurney entered for Monaco. The organizers and Team Lotus then got into a fight and the result was that the team withdrew. Graham Hill took pole position in his BRM with Jack Brabham second. The second row consisted of Stewart and Ferrari's number two Lorenzo Bandini while John Surtees and Richard Attwood (in a Reg Parnell Racing Lotus) shared the third row. The fourth row featured Bruce McLaren's Cooper and Denny Hulme, making his F1 debut as a stand-in for Gurney at Brabham.

The two BRMs made the best starts and so Hill led Stewart for the early part of the race chased by Bandini, Surtees, Brabham and McLaren. On lap 25 Hill was coming up to lap the private Brabham of Bob Anderson which was going very slowly because of a mechanical problem. Hill had to go up an escape road to avoid hitting the backmarker and he dropped to fifth place. Stewart led for the next four laps and then had a spin at Ste Devote and dropped to fourth, just ahead of Hill. This left Brabham in the lead, the Australian having worked his way up past the two Ferraris, but he went out with an engine failure soon afterwards and so Bandini was left ahead. While this was going on Hill was making progress, having passed Stewart and then Hill. On lap 65 he took the lead from Bandini while Stewart closed on Surtees and took third place on lap 77. Two laps later there was a dramatic incident when Paul Hawkins spun his private Lotus at the chicane and went into the harbor. He emerged unhurt.

Hill duly recorded his third consecutive Monaco victory.