With a huge entry in Belgium a fortnight earlier the Automobile Club de Monaco had to cut back the entry by refusing to allow several teams to take part. There were still 28 drivers vying for the 25 places on the grid. In the end mechanical problems took care of Jochen Mass (Surtees) and Chris Amon (Amon) and so only Rikki von Opel (Brabham) failed to qualify.

The two Ferraris of Niki Lauda and Clay Regazzoni qualified first and second with Ronnie Peterson (in a Lotus 72 rather than the new 76) and Patrick Depailler (Tyrrell) sharing the second row. Then came Jody Scheckter (Tyrrell) and Jean-Pierre Jarier (Shadow), James Hunt in the Hesketh and Carlos Reutemann's Brabham. The top 10 was completed by Hans Stuck's March and Mike Hailwood in the Yardley McLaren. Emerson Fittipaldi was a disappointed 13th while Jacky Ickx was 19th in his Lotus.

Depailler had engine troubles during the shakedown laps before the race and so started from the back of the grid. This meant that the two Ferraris were able to motor away at the start without anyone threatening their domination. Regazzoni led Lauda. Behind them Jarier was third. In the midfield there was chaos as Denny Hulme (McLaren) collided with Jean-Pierre Beltoise (BRM). The result was carnage involving Arturo Merzario (Iso Marlboro), Carlos Pace (Surtees) and Brian Redman (Shadow). Also suffering damage were Vittorio Brambilla (March), Vern Schuppan (Ensign) and Tim Schenken (Trojan).

With the midfield decimated, the interest rested firmly on the leaders and it was Peterson who looked strong in the early laps as he forced his way ahead of Jarier on the third lap. On the next lap Stuck ran into the back of Hunt at Casino Square and the March clattered into the barriers, Stuck breaking his thumb. There was also a frightening moment for François Migault (BRM) when he had a brake failure at the chicane and went head-on into the catchfencing which had been erected there.

On the sixth lap Peterson made a mistake at Rascasse and was hit by Reutemann. The Brabham driver retired but Peterson was able to continue in sixth place, having been overtaken by Jarier, Scheckter and Hailwood. The last-named did not survive for long because on lap 12 he slid off the road on oil.

After only a dozen laps half the field was gone. For a few laps the race settled down Peterson began to make up for lost ground and overtook Scheckter for fourth place. Two laps later Regazzoni made a mistake at Rascasse and spun out of the lead. He rejoined behind Lauda, Jarier, Peterson and Scheckter. On lap 25 Peterson overtook Jarier for second and set off in pursuit of Lauda. The Ferrari looked strong but on lap 33 Lauda's engine failed. Peterson took the lead and with Scheckter having passed Jarier, second place went to the South African. The positions remained unchanged all the way to the finish with Peterson winning from Scheckter, Jarier, Regazzoni, Fittipaldi and John Watson, scoring his first F1 points in the Hexagon of Highgate Brabham.