The weekend was overshadowed by continuing fallout from the Japanese Grand Prix two weeks earlier, where McLaren teammates Alain Prost and Ayrton Senna had collided while fighting for the race lead and the World Championship. A post-race disqualification handed to Senna for cutting the chicane confirmed Prost as a triple World Champion. Senna was deeply unhappy with FISA and its French president Jean-Marie Balestre, whom he accused of manipulating the outcome for his countryman. He initially threatened to boycott Adelaide and leave Formula One, but after discussions with his family and McLaren boss Ron Dennis he arrived at the circuit and immediately set the pace on Friday.
McLaren were simultaneously appealing Senna's Japanese disqualification. Ron Dennis stated the appeal was not motivated by challenging Prost's championship, but by the team's belief it had unjustly forfeited a race win along with associated prize money and Marlboro sponsorship bonuses. FISA had also labelled Senna a dangerous driver and issued him a six-month suspended sentence in a Paris hearing held the week following Japan.
Several retirements from Formula One were announced during the event. Piercarlo Ghinzani declared his retirement after pre-qualifying on the Thursday, ending a career of 76 Grands Prix that included a single points finish, fifth at the 1984 Dallas Grand Prix for Osella. Rene Arnoux announced his retirement at the drivers meeting before the race, at the age of 41, in what would become his 149th and final Grand Prix start, having begun his career in 1978. It was also the final race for American Eddie Cheever and the last entered by Briton Jonathan Palmer, who failed to qualify. The German Zakspeed and Rial teams made their final appearances at the event.
Senna took pole position on Saturday with a lap below 1:17 seconds, with Prost second and Pierluigi Martini an impressive third in his Pirelli-shod Minardi. The Williams-Renaults of Boutsen and Patrese were fifth and sixth. Gerhard Berger fell to 14th after engine failure forced him to use Mansell's race car, a run halted when its on-board fire extinguisher was triggered. With 24 seconds of the session remaining, Eddie Cheever crashed his Arrows-Ford heavily at the entrance to the pit straight, causing the red flag. Cheever was uninjured. Jonathan Palmer, Luis Perez-Sala, and the two Rial drivers failed to qualify.
Sunday arrived cool and overcast, with rain moving in before the start. An extra 30-minute wet-weather setup session saw many drivers aquaplaned off the circuit. Prost and Berger, along with Piquet, Boutsen, Patrese, and Nannini, publicly argued conditions were too dangerous and called for a delay. Senna wanted to race: with McLaren's appeal pending, the championship was technically unsettled and victory could theoretically restore his title. Senna later privately admitted he considered conditions too dangerous but felt contractually bound to start.
At the start, Prost initially passed Senna, but Senna reclaimed the lead into the first corner. On the opening lap, a collision involving JJ Lehto's car after the first chicane partially blocked the road and caused the race to be stopped. Prost pulled into the pits and withdrew, citing safety, and did not contest the restart despite the best efforts of Ron Dennis. Debate raged on the grid over whether to continue; Berger, Mansell, Patrese, Boutsen, Piquet, and Nannini argued for abandonment, while Martini, Brundle, Jean Alesi, de Cesaris, and Caffi argued for a restart. FOCA boss Bernie Ecclestone pressed for the race to continue.
At the second start, Senna pulled away rapidly and was nearly nine seconds clear after the first lap, benefiting from a clear track and unimpeded visibility. The attrition behind him was relentless: Arnoux retired after being spun by Cheever, ending his career; Berger and Philippe Alliot collided; Derek Warwick spun when his throttle stuck open. The defining incident came when Senna ran into the back of Brundle while lapping him alongside Piquet. The impact was captured by a rear-facing camera on Brundle's Brabham; television commentator Murray Walker described Senna's McLaren as bearing down on him like Jaws. Senna returned to the pits with major front suspension damage and his left front wheel missing. Both he and Brundle retired.
Boutsen and Patrese now led. Piquet, blinded by spray and unable to see his braking markers, ran into the back of Ghinzani's Osella at speed at the hairpin at the end of the Brabham Straight. One of Ghinzani's rear tyres struck Piquet's helmet; Piquet was uninjured, but Ghinzani retired with a banged ankle, ending his Formula One career. Cheever retired on lap 42, his 143rd and final Grand Prix.
Satoru Nakajima set the fastest lap of the race and climbed from last place to fourth, almost catching Patrese for third. His drive drew praise from James Hunt, who on lap 29 called it certainly Nakajima's finest race ever. Nannini closed to within a second of Boutsen during the middle stages, aided by Benetton teammate Emanuele Pirro who held Boutsen up for over three laps before being instructed to move aside. Boutsen eventually pulled away to win by 28 seconds. Patrese finished third, noting post-race that he had driven conservatively for position, knowing Mansell's retirement would give him a career-best third in the Drivers' Championship. Nakajima was fourth in his last race for Lotus, Pirro fifth in his final race for Benetton, and Martini sixth, three laps down, his result confirming the inferiority of Pirelli wet-race tyres compared to the Goodyears on the leading cars.