Coming just two weeks after the scandalous Spanish Grand Prix, the organizers at Monaco did some quick safety work on the track and decided that only 18 cars should be allowed to start and that the grid should be staggered to avoid another first corner accident. There were 26 cars entered. Jacques Laffite was back with Williams while Graham Hill took part in what would be his last event, running one of his cars but failing to qualify. Hesketh had built a third car and this was rented to Torsten Palm, who had sponsorship from Polar Caravans.

The practice was frenetic as teams tried to ensure that they qualified but there was disaster for Williams with neither Arturo Merzario or Laffite making it.

Pole position went to Niki Lauda by six-tenths of a second while the Shadows of Tom Pryce and Jean-Pierre Jarier were second and third. Ronnie Peterson was next in his Lotus while Vittorio Brambilla (March), Clay Regazzoni (Ferrari), Jody Scheckter (Tyrrell), Carlos Pace (Brabham), Emerson Fittipaldi (McLaren) and Carlos Reutemann (Brabham) completed the top 10.

The track was damp at the start of the race and the field set off on wet weather tires. Lauda took off into the lead but Pryce was slow away and so Jarier went into second place with Peterson third and Pryce fourth. On the first lap Jarier hit the barriers at Mirabeau. This upset his car and he hit the wall again at the chicane. Peterson and Pryce worked their way through the wreckage and the order then remained unchanged at the front until the 19th lap when Pryce spun and dropped behind Scheckter and Fittipaldi. Not long afterwards the front-runners began to stop for slick tires and when this was completed Lauda was still ahead but Fittipaldi was up to second and Pace third, having stopped earlier than Peterson who slipped to fifth behind Scheckter. The South Africa had a puncture later and had to stop. This gave Peterson fourth place again. Little changed after that with Lauda leading Fittipaldi all the way to the flag (which came early because of the two hour time limit) although the Brazilian had closed up on the Ferrari. Pace was third and Peterson fourth. Jochen Mass (McLaren) had been running fifth but was overtaken by Depailler on the penultimate lap and so had to settle for a single point.