The 1987 season marked a transitional period for Formula One as the FIA prepared for a total ban on turbocharged engines scheduled for 1989. To encourage the return of naturally aspirated powerplants, the displacement limit for non-turbo engines was increased from 3.0 to 3.5 litres. Teams running with a naturally aspirated engine could carry and use unlimited amounts of fuel during a race. These cars competed for two new dedicated trophies: the Jim Clark Trophy for drivers and the Colin Chapman Trophy for constructors.
Turbocharged cars faced stricter limitations, including a fuel capacity cap of 195 litres and a mandated "pop-off" valve to limit boost pressure to 4.0 bar. Despite these restrictions, which reduced output by approximately 300 bhp compared to the previous year, leading teams largely offset the power loss through advancements in aerodynamics and tyre technology. Following Pirelli's withdrawal from F1 at the end of 1986, Goodyear became the sole tyre supplier for the first time since 1963. The FIA also banned super-soft qualifying tyres to eliminate the unpopular practice of having to find a clear lap on tyres which were good for two flying laps at best.
The grid underwent significant restructuring following the withdrawal of Renault as an engine supplier at the end of 1986. Lotus bought one-year-old Honda engines. Tyrrell signed a contract for Ford-Cosworth V8s, preparing them for the new regulations banning turbos in 1989. AGS also made the switch to Cosworth naturally aspirated V8s. Benetton signed a deal with Ford-Cosworth for their V6 turbo. McLaren lost designer John Barnard to Ferrari but gained the services of Gordon Murray as the new Technical Director. Arrows attracted former Haas Lola aerodynamicist Ross Brawn as its new Technical Director and Chief Designer. With BMW pulling out of Formula One, Arrows' major sponsor bought the remaining supply of BMW M12/13 4-cylinder engines, re-named them as the Megatron M12/13 engines, and supplied some to the Ligier team.
Several notable driver movements occurred prior to the season. Keke Rosberg retired from Formula One, opening the door at McLaren for Stefan Johansson. Satoru Nakajima made his debut at Lotus, next to Ayrton Senna, having won six out of seven championships in Japanese Formula Two. His promotion was backed by Honda. Martin Brundle and Jonathan Palmer switched teams, Brundle moving to Zakspeed and Palmer to Tyrrell. Palmer endured a more successful year, winning the Jim Clark Trophy as highest-scoring driver with a non-turbocharged car.
The championship battle was dominated by the Williams-Honda teammates, Nigel Mansell and Nelson Piquet. Although Mansell was often the faster driver, securing pole positions and six wins, Piquet utilized the team's new active-suspension system and a more consistent approach to maintain a points lead.
The rivalry intensified mid-season. At the Hungarian Grand Prix, Ayrton Senna informed Lotus that he would not be staying with the team in 1988, and Team boss Peter Warr moved quickly and signed Nelson Piquet, who was unhappy that Frank Williams would not give him clear number one status at Williams. Senna was going to join Alain Prost at McLaren.
The battle for the title remained close through the European rounds. Mansell achieved a notable victory at the British Grand Prix, where he overcame a deficit to Piquet by pitting for fresh tyres and executing a passing maneuver at Stowe Corner on lap 63. However, Piquet responded with victories in Germany, Hungary, and Italy to maintain his championship advantage.
The season was marked by several high-impact accidents and confrontations. During qualifying for the San Marino Grand Prix, Nelson Piquet suffered a huge accident at the flat out Tamburello corner when he suffered a tire failure and was forbidden from racing by F1 doctor Sid Watkins.
At the Belgian Grand Prix, a collision between Mansell and Senna at the start of the restarted race led to both drivers spinning out. Senna was out, but Mansell was able to get going again. This put Piquet into the lead and Mansell at the back. He would continue until damage from the incident caused him to stop on lap 17. After he retired, he marched to the Lotus pits to confront Senna, and the two drivers got into a physical altercation. Both had to be separated.
The Austrian Grand Prix at the Österreichring highlighted ongoing safety concerns. The race required three starts due to multiple pile-ups on the narrow pit straight. In the first restart, a collision involving half the field blocked the track, though most drivers were able to participate in the third and final start.
The championship was decided prematurely during the penultimate round at the Japanese Grand Prix. During qualifying at the Suzuka) track, Nigel Mansell crashed heavily at the fast Snake sweepers behind the paddock. The accident left him with severe bruising to his backbone, re-triggering an old injury, and it was decided that he should not be allowed to race. Having spent Friday night in hospital, Mansell flew back to Europe on Saturday evening. With Mansell unable to compete in the final two rounds, Nelson Piquet was World Champion for the third time, his season-long consistency having paid dividends.
Nelson Piquet's title victory was characterized by efficiency; he won the championship with 73 points, despite winning only half as many races as Mansell. Alain Prost finished the season fourth in the standings but achieved a historic milestone at the Portuguese Grand Prix, where he recorded his 28th career victory, surpassing Jackie Stewart's long-established record.
In the naturally aspirated sub-category, Jonathan Palmer won the Jim Clark Trophy for Tyrrell, while Tyrrell-Ford claimed the Colin Chapman Trophy. The season saw a high attrition rate in several races, most notably in Germany, where only 6 of the 26 starting cars finished – the lowest number since the 1984 Detroit Grand Prix-circuit). Most of the failures in this race were engine- or turbo-related.
The 1987 season saw the entry of new teams looking toward the future 3.5-litre regulations. Scuderia Coloni debuted at the Italian Grand Prix with Nicola Larini. The Osella team expanded to two cars with the Swiss Franco Forini joining Alex Caffi. Yannick Dalmas made his debut during the Mexican Grand Prix, driving a second Larrousse car next to Philippe Alliot. Dalmas was not eligible for points as the team had officially entered only one car for the entire championship. Following Mansell's injury, Brabham driver Riccardo Patrese was given the opportunity to replace Nigel Mansell for the last race of the season, when the Williams driver was injured during qualifying for the Japanese Grand Prix. He had already been signed by Williams for 1988. 1987 F3000 champion Stefano Modena stepped in to make his debut at Brabham.
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