A fortnight after the South African GP (which had been missed by Renault and Ligier because of political pressure in France) the F1 teams were back together for the last race of the season at the new street circuit in Adelaide, South Australia. With Ligier back in action Philippe Streiff returned to the team and Ivan Capelli was back in the second Tyrrell. With many of the drivers switching teams and several teams closing down (notably Renault Sport and Alfa Romeo) the atmosphere was very much one of the end of term. Those who had not been working had taken a break between races and with the World Championship settled and the Australians enthusiastic the race was more relaxed than normal.

Qualifying resulted in another pole position for Ayrton Senna's Lotus-Renault with the Williams-Hondas of Nigel Mansell and Keke Rosberg ahead of Alain Prost's McLaren-TAG, Michele Alboreto's Ferrari, Marc Surer's Brabham-BMW, Gerhard Berger's Arrows-BMW, Patrick Tambay's Renault, Nelson Piquet's Brabham-BMW and Elio de Angelis's Lotus-Renault.

Mansell took the lead at the start but on the first lap he and Senna collided. Mansell pitted to retire. Rosberg went into the lead with Senna behind him and Alboreto third. Then came Prost, Berger, Surer and Tambay although Gerhard soon had a small off and dropped back. tyres were a problem and soon drivers were stopping to change rubber. These included Alboreto and so Prost moved to third with Marc Surer (Brabham-BMW) fourth. De Angelis was black-flagged for having started illegally on the grid, after his engine failed to fire up on the pre-grid. When he did he should have started at the back. This meant that Piquet was fifth albeit briefly as the Brabham failed him again and so Lauda was fifth with Alan Jones in the Beatrice Lola-Hart sixth. It did not last long and Jones soon retired with engine failure.

Surer moved ahead of Prost to take third but later had a big moment and dropped behind the Frenchman again but then Prost's engine blew and the Swiss driver retook the position. Lauda was a distant fourth with Alboreto fifth and Streiff sixth.

Rosberg and Senna battled for the lead for much of the mid-race but when Rosberg pitted for tyres he caught Senna by surprise and the Brazilian ran into the back of the Williams and lost his front wing. Senna was furious and tried to push on without a front wing but the car was all over the place and after two laps (during which he lost the lead again to Rosberg) Senna pitted. Surer had run into the back of Fabi and spun. The BMW engine stalled and he was out. This meant that Lauda was second with Senna behind him. Ayrton soon overtook Lauda (who had not stopped for tyres). Rosberg decided to stop again but this time the pit stop went wrong and he rejoined behind both Senna and Lauda. It looked like being the perfect finish for Lauda's career but he had serious brake trouble and on lap 58 he hit a wall. Senna was thus leading again with Rosberg just behind him but on lap 61 the Lotus began smoking and retired. At the same time Alboreto stopped with a gearbox problem and so second place was suddenly in the hands of Jacques Laffite's Ligier. Rosberg pitted again for new tyres but was still well ahead. Laffite realized that there was no way he could catch Keke and backed off but his team mate Streiff came charging up. Laffite thought he was a lap behind and Streiff thought that he was under pressure from Capelli (who was actually a lap behind) and as a result the two Ligiers contrived to collide. Laffite's car was largely undamaged but Streiff's lost its right front wheel. Undeterred by this Streiff decided to drive it the one lap to the finish line, which he succeeded in doing. Capelli was fourth with Johansson fifth and Berger sixth.