Between the Italian and Canadian GPs Alan Jones announced that he was retiring for Formula 1 and there were rumors that Mario Andretti would do the same. At the same time Niki Lauda was spotted testing one of the new McLaren MP4/1s at Donington Park and it looked like he would be making a comeback. At the same time Siegfried Stohr decided that he no longer wanted to be an F1 driver and a deal was struck for Riccardo Patrese to be partnered in Canada by Jacques Villeneuve, Gilles Villeneuve's brother.

Qualifying resulted in pole position for Nelson Piquet with his title rival Carlos Reutemann alongside. Jones was third while Alain Prost was fourth in his Renault. Nigel Mansell was an impressive fifth for Lotus while Héctor Rebaque was a fine sixth in the second Brabham. The top 10 was completed by Elio de Angelis (Lotus), René Arnoux (Renault), John Watson (McLaren) and Jacques Laffite (Talbot Ligier). Gilles Villeneuve was 11th while his brother Jacques failed to qualify along with the two Fittipaldis, the two Tolemans and Beppe Gabbiani's Osella.

The weather had turned wet by race day and at the start Jones took the lead after banging wheels with Reutemann. The Argentine driver had to lift off and he was overtaken by rival Piquet, Prost and de Angelis. Further back Villeneuve tipped Arnoux into a spin, the Renault bashing into Pironi's Ferrari as it went off.

In the laps that followed Villeneuve moved up to take third on lap 7 when Jones spun and Piquet dropped back as he tried to avoid the Williams. This let Prost take the lead with Laffite second. Watson moved to fourth and things began to settle down until lap 13 when Laffite moved into the lead. He was followed through into second place a few laps later by Villeneuve and as Prost faded further he fell behind Watson as well. Watson was then able to catch and pass Villeneuve as well and that was how the race ended with fourth place going to Bruno Giacomelli (Alfa Romeo), fifth to Piquet and sixth to de Angelis. Piquet's two point mean that he and Reutemann headed to Las Vegas separated by a point while Laffite had an outside chance of winning the title.