The Autodromo Dino Ferrari, also known as Imola, had previously hosted a non-championship event in 1979 and various non-championship races since 1953. The circuit is located to the east of Bologna in the Province of Emilia Romagna and is closer to the Ferrari factory in Maranello. The Automobile Club of Bologna took over the organization of the event. The circuit runs in an anti-clockwise direction and features uphill and downhill sections, though it also includes several artificial chicanes. The race was run over 60 laps.
Monza, the traditional home of the Italian Grand Prix, had hosted the event from 1950 to 1979 and returned as host from 1981 onward. Imola continued to host Formula One races as the San Marino Grand Prix from 1981 to 2006.
Testing on Friday morning was delayed due to fog grounding the medical emergency helicopter. The Renault cars of Jean-Pierre Jabouille and René Arnoux were the pace-setters, despite concerns that the circuit's sharp corners would not suit the turbo-charged cars. Jabouille set the fastest lap in 1 minute 34.339 seconds, with Arnoux recording 1 minute 34.759 seconds. Bruno Giacomelli in his Alfa Romeo qualified third with a time of 1 minute 35.082 seconds. Alan Jones in a Williams and Nelson Piquet in a Brabham were close behind in the 1 minute 35 second bracket, followed by Carlos Reutemann.
Gilles Villeneuve tested the newly debuted turbo-charged Ferrari 126C during Saturday morning practice, recording a best lap of 1 minute 35.751 seconds. However, he reverted to his regular Ferrari 312T5 for the race. Reigning World Champion Jody Scheckter, also driving a Ferrari 312T5, had a significant crash on a fast bend during Saturday practice, destroying his car but emerging unhurt. He later announced his retirement from the sport. Manfred Winkelhock made his Formula One debut, substituting for Jochen Mass at Arrows. A qualifying collision between Winkelhock and Nigel Mansell's Lotus resulted in both drivers failing to make the grid. Arnoux ultimately secured pole position with a lap of 1 minute 33.988 seconds, the only driver to get below 1 minute 34 seconds.
At the start of the race, Reutemann overheated his clutch, causing him to drop back. Piquet and Giacomelli moved up behind the Renaults, with Villeneuve also in contention. On lap 4, Piquet, driving a Brabham, took the lead from Jabouille and was never headed, winning by nearly half a minute. On lap 6, Villeneuve's left-rear tire burst on a right-hand curve before the Tosa hairpin. His Ferrari bounced across the track, tearing off the rear end. Villeneuve escaped unhurt. Giacomelli, following closely, ran over the debris, punctured a tire, and went off the track, retiring from the race. Bruno Giacomelli was shaken by the incident.
Jones, who had started sixth, moved into second place by half distance. Reutemann, despite clutch issues and later a broken exhaust manifold pipe, recovered to third place after Jabouille's gearbox broke with six laps remaining. Elio de Angelis finished fourth in his Lotus, Keke Rosberg fifth in a Fittipaldi, and Didier Pironi sixth in a Ligier. The win was Piquet's third of the season and second in succession, giving him a one-point lead in the Drivers' Championship over Jones.
Jones' and Reutemann's podium finishes allowed Williams to secure the Constructors' Championship with two races remaining, marking the team's first such title.
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