Rosberg entered the weekend leading the Drivers' Championship with 141 points, 24 ahead of Hamilton, with Sebastian Vettel a further 21 points behind. Mercedes led the Constructors' Championship with 258 points over Ferrari on 177 and Red Bull on 140.
The Red Bull Ring was resurfaced ahead of the weekend to also accommodate a MotoGP round, and teams projected lap times under 1:06.000 for the first time. New "baguette" kerbs — low ridges positioned outside corners to penalise track-limit violations — were also introduced. Verstappen called them "dangerous" after damaging his car twice in free practice, and Mercedes urged the FIA to modify them. In Saturday practice Rosberg crashed when his suspension broke at the kerbs at turn two, requiring an unscheduled gearbox change; a five-place grid penalty was applied. Vettel also received a five-place penalty for a separate unscheduled gearbox change prior to the weekend.
Hamilton set the fastest time in Q2 at 1:06.228, the fastest lap recorded in any session at the circuit that weekend. Ferrari and Red Bull used the supersoft compound in Q2 while Mercedes used ultrasofts, giving the non-Mercedes teams the option of starting the race on a harder tyre. Hamilton took pole in Q3; Rosberg's five-place penalty dropped him off the front row. Nico Hülkenberg moved to second on the grid — only his second career front-row start — with Button third following Vettel's demotion. Räikkönen, Ricciardo, Bottas, Verstappen, and Massa completed the top ten.
Hamilton led from the start. Rosberg climbed from his penalised grid position through the midfield. Ferrari suffered a major retirement when Vettel's right-rear tyre exploded on lap 27 and he crashed into the barriers; the resulting safety car brought the field together with Rosberg leading from Hamilton. Räikkönen briefly led during the first pit stop cycle before emerging behind both Red Bull drivers.
After a second round of pit stops, Rosberg emerged ahead of Hamilton following a faster Red Bull stop and a Hamilton error on his out-lap. Verstappen led on softs fitted on lap 15 before yielding to Rosberg on lap 61, with Hamilton following past shortly after. As the Mercedes pair duelled, Hülkenberg and Massa retired in the closing laps. On the final lap, Hamilton attempted to pass Rosberg into turn two. Rosberg turned in late on the inside, making contact that damaged his own front wing and pushed Hamilton wide. Hamilton rejoined, got ahead at turn three, and won. Rosberg nursed his damaged car to the line and was classified fourth after both Verstappen and Räikkönen passed him.
Toto Wolff called the collision "brainless" and declared he was "fed up" with collisions between his drivers, warning the team might consider issuing team orders if racing without contact proved impossible. Niki Lauda also criticised Rosberg's move. Wolff later said the team had even discussed fines or temporary suspensions for a future similar incident. Rosberg was given a ten-second time penalty — which did not affect his finishing position, as he had been 14 seconds clear of Ricciardo — and two penalty points on his licence for completing the race with a damaged car. It was the second time in five races the pair had made contact, following the Spanish Grand Prix.
Pirelli attributed Vettel's tyre failure to debris on the circuit rather than Ferrari's strategy. Hamilton's championship deficit was reduced to eleven points. Räikkönen said after the race that he felt he could have passed Verstappen near the end but that it had not been an easy day for Ferrari.
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