The field was expanded at Monza by the arrival of the new Coloni team, fielding Nicola Larini. The Osella team expanded to two cars with Franco Forini joining Alex Caffi. Honda had announced that it would not be supplying Williams with engines in 1988, despite the fact the Japanese company still had one year to go on its contract. Honda had decided that it wanted to be with McLaren. This led to questions over whether Honda would treat the two Williams drivers fairly in the battle for the World Championship as Nelson Piquet would be a Honda driver in 1988 and Mansell would not. The Honda men said that it made no difference but few believed them.

The Williams team had its new active-suspension system ready and Nelson Piquet used it, while Nigel Mansell stayed with a conventional car.

Piquet took pole position with Mansell a tenth behind him but Ayrton Senna was beaten the third place by Gerhard Berger's Ferrari. Then came Thierry Boutsen (Benetton-Ford), Alain Prost's McLaren-TAG, Michele Alboreto's Ferrari and Teo Fabi's Benetton. The top 10 was completed by the two Brabhams of Andrea de Cesaris and Riccardo Patrese.

At the start of the race Mansell made a good start but then missed a gearchange and so Piquet went into the lead at the first corner with Berger third ahead of Boutsen, Prost and Senna. At the start of the second lap Berger challenged for second place and Mansell closed the door so the tow cars collided and Boutsen moved to second place with Berger third and Mansell fourth. The order then remained the same until Mansell was finally able to pass Berger on lap 17. he then overtook Boutsen as well.

The mid-race pit stops put Senna into the lead and it looked as though he might be able to go without a pit stop as he had done in Monaco and Detroit. The two Williams-Hondas were second and third with Boutsen behind them. Senna looked fine until lap 43 when he was lapping Piercarlo Ghinzani's Ligier and went off across a sand trap at the Parabolica. By the time he was back on the track Piquet was in the lead. Senna tried to regain the place but his tyres would not allow him to challenge and so they finished with Piquet two seconds ahead. Mansell was third with Berger fourth, Boutsen fifth and Stefan Johansson (McLaren) sixth.