Entering the season, Michael Schumacher and defending champion Mika Häkkinen were widely regarded as the principal title contenders. Schumacher was favoured by bookmakers, and former champions including Jody Scheckter and Schumacher's ex-teammate Eddie Irvine — now driving for the newly rebranded Jaguar Racing, formerly Stewart Grand Prix — expected him to take the title.
Three drivers made their Formula One debut: Nick Heidfeld at Prost alongside Jean Alesi, Gastón Mazzacane at Minardi replacing Luca Badoer, and Jenson Button at Williams replacing Alessandro Zanardi. Button became the youngest British driver ever to start a Formula One race, though his selection attracted scepticism, including a comment from Sauber driver Mika Salo that Button's inexperience could mean he would hurt himself or others.
Four practice sessions ran across Friday and Saturday. Häkkinen was fastest in the first session, while Michael Schumacher recorded the quickest times on both Friday and Saturday despite an accident at turn 14 in the second session and an early halt caused by an on-board camera melting a wiring loom on his Ferrari. During the final practice session Button crashed heavily at turn ten at 160 mph after clipping a kerb, requiring a ten-minute session stoppage while marshals removed his car.
McLaren locked out the front row in qualifying, Häkkinen taking pole from Coulthard by three-tenths of a second. Schumacher qualified third after a Coulthard spin brought out a red flag and prevented a final flying lap attempt. The top-three qualifying positions were the same as in the two preceding seasons. Barrichello was fourth, with the Jordans of Heinz-Harald Frentzen and Jarno Trulli on the third row. Button qualified 21st, 1.6 seconds slower than teammate Ralf Schumacher, and afterwards described his session as something that could not get worse.
At the start Häkkinen held his lead and Frentzen overtook Barrichello into turn one. Button gained six places on the opening lap, rising from 21st to 15th. Johnny Herbert retired on lap 2 with clutch problems. A front suspension failure on Pedro de la Rosa's Arrows on lap 7 triggered a collision that also retired Eddie Irvine's Jaguar, bringing out the safety car.
Coulthard came in for an unscheduled stop with engine problems after the restart and retired on lap 11. Häkkinen, leading comfortably, retired on lap 18 with a pneumatic valve failure identical to Coulthard's — a double retirement almost matching that of the 1999 race. Schumacher inherited the lead with a 16.5-second advantage over Frentzen.
Ferrari switched Barrichello to a two-stop strategy on lap 33 to leapfrog Frentzen. Trulli retired his Jordan with gearbox problems on lap 36, and a slow pit stop for Frentzen on the same lap — costing more than ten seconds — dropped him to sixth; he retired three laps later with the same gearbox failure. Barrichello took the lead on lap 45 by overtaking Schumacher, then made his second stop and rejoined in second.
Ralf Schumacher moved to third as the McLaren and Jordan retirements cleared the way. Button ran as high as third before a pit stop on lap 36 and was sixth when an engine failure ended his debut with eleven laps remaining. Michael Schumacher won after 58 laps in a time of 1:34:01.987, twelve seconds clear of Barrichello. Villeneuve finished fourth, giving BAR their first Formula One points. Fisichella was fifth. Mika Salo crossed the line sixth but was disqualified several hours after the race for a bodywork infringement, promoting Ricardo Zonta into the final points position.
Ferrari led the Constructors' Championship on 16 points after the opening round, followed by Williams and BAR on four apiece. Schumacher said after the race that he had been managing tyres and fuel for a late attack and would have preferred to race the McLarens to the finish to demonstrate how competitive the Ferrari truly was.