A couple of weeks after John Watson's popular win at Silverstone - the first victory for a carbon composite chassis in F1 - the F1 circus was in Germany. The field was unchanged apart from the fact that Team Lotus was back in action with a pair of Lotus 87s both sporting new JPS sponsorship. There were some changes of tyres with Tyrrell running on Avons, Lotus on Goodyear and Arrows on Pirellis.

It was no surprise to see the two Renault turbo cars on the front row with Alain Prost nearly half a second quicker than René Arnoux. World Championship leader Carlos Reutemann was third with his Williams team mate Alan Jones fourth. Didier Pironi was fifth his Ferrari and Nelson Piquet was sixth in his Brabham (apparently without any problems from his Silverstone accident) and the top 10 was completed by Jacques Laffite (Talbot Ligier), Gilles Villeneuve (Ferrari) and the two McLarens of John Watson and Andrea de Cesaris.

At the start Prost took the lead but Reutemann managed to get ahead of Arnoux. On the run down to the first chicane Pironi also went past René and Piquet tried the same at the Ostkurve. The Renault and the Brabham touched. This meant that Arnoux had to pit at the end of the lap with a deflated right rear. While this was going on Jones went past Piquet. Halfway around the second lap Pironi disappeared with a blown engine and so Prost led Reutemann, Jones, Piquet, Laffite, Villeneuve and Patrick Tambay (Talbot Ligier). Villeneuve soon dropped away but Jones was in combative form and was challenging Prost for the lead. Behind them Piquet had overtaken Reutemann and was closing up and the fight for the lead was soon between the three cars. But Piquet's tyres could not take the pace and he dropped back behind Reutemann.

On lap 21 Jones finally managed to get ahead of Prost when they were lapping Arnoux. Behind the top five Rebaque had moved into sixth but this became fifth when Reutemann stopped on lap 28 with an engine failure.

At two-thirds distance rain began to fall and as the Renault became more difficult to control Piquet was able to take second from Prost and then Jones's car began to misfire and soon Piquet and Prost were both ahead. Jones headed for the pits.

Piquet thus inherited victory with Prost second, Laffite third and Rebaque fourth. Eddie Cheever was fifth with Watson sixth.