The race took place on the 5.303 km Albert Park Circuit, marking the ninth time the venue had hosted a round of the World Championship. Ten constructors each entered two race drivers. Under regulations allowing the bottom six teams from the 2003 Constructors' Championship to field a third car in Friday practice, Anthony Davidson drove for British American Racing, Björn Wirdheim for Jaguar, Ricardo Zonta for Toyota, and Timo Glock for Jordan. Bas Leinders was entered as Minardi's third driver but was denied an FIA Super Licence due to insufficient running in a Formula One car.
Ferrari introduced their new F2004 chassis for the season opener, a departure from their approach in the two preceding years. Renault focused development of the R24 on reducing the size of the asymmetrically-mounted radiating masses. The event carried broader significance as the first race since the 2001 San Marino Grand Prix in which cars competed without fully-automatic gearboxes and launch control, both banned by the FIA after the 2003 season. Traction control remained permitted and would continue to be available for three further seasons before its ban for 2008. The race also marked the 150th Formula One Grand Prix for the McLaren and Mercedes engine partnership since 1995, and the Formula One debut of Jaguar driver Christian Klien.
Ferrari locked out the front row, with Schumacher taking pole ahead of Barrichello. Juan Pablo Montoya qualified third for Williams. Three drivers failed to set a time in the second qualifying session: Gianmaria Bruni and Christian Klien were both affected by hydraulics problems, while Olivier Panis was halted by an electronics failure.
At the start, Montoya attempted to hold position into Turn 1 but braked too late, allowing Fernando Alonso's Renault to pass him. Alonso was forced to put wheels on the grass to avoid a collision as Montoya ran wide. Montoya fell to seventh. Jarno Trulli advanced from ninth on the grid to fifth through the opening corner, while Takuma Sato made contact with the rear of Trulli's Renault, causing minor but consequential damage to both cars. Both Saubers also briefly ran off the circuit in the opening lap.
The Ferraris moved clear immediately. By lap four they held a two-second advantage over the field; by lap eight, five seconds separated them from Alonso in third. No one else could match the Renault's pace at the front of the midfield, leaving Alonso with an uncontested but distant third place. In the midfield, Giancarlo Fisichella engaged in a prolonged battle with Jordan's Nick Heidfeld. After being passed by Fisichella, Heidfeld retired with a transmission failure. An incident during Heidfeld's pit stop saw mechanic Matt Deane and refueller Mick Gomme struck by the car, both suffering bruising.
Montoya attempted to recover by passing Alonso around the outside of the first turn, but again outbraked himself and ran wide, dropping behind his Williams teammate Ralf Schumacher. Despite repassing Ralf Schumacher on track, Montoya finished behind him in fifth following the final pit rotations.
Michael Schumacher won with Barrichello second, their margin over Alonso in third exceeding twenty seconds. Jenson Button finished sixth for BAR. Jarno Trulli took seventh as the first lapped runner. McLaren struggled for competitiveness: Kimi Räikkönen was the first retirement of the season with an engine failure, while David Coulthard finished a lapped eighth for the team's only point of the weekend.
The one-two finish gave Ferrari a nine-point lead in the Constructors' Championship after a single race, the first Ferrari one-two since the 2002 Japanese Grand Prix. Michael Schumacher led the Drivers' standings with ten points, ahead of Barrichello on eight and Alonso on six. Williams and Renault each placed both cars in the points, while McLaren's single point underscored a shift from the form they had shown in preceding seasons. The result set the tone for a 2004 season in which Ferrari's dominance was apparent from the opening lap.
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