The 1921 race was the first French Grand Prix since the conclusion of World War I. German entries were not permitted. The ACF adopted regulations matching those of the Indianapolis 500, setting a maximum engine displacement of three litres. The United States was represented by Duesenberg; France by Ballot and Mathis. Three Italian Fiat entries failed to materialise due to labour disputes. The British-French alliance Sunbeam-Talbot-Darracq entered seven nearly identical cars under three different marque names — Sunbeam, Talbot, and Talbot-Darracq — though the two Sunbeam entries were withdrawn for lack of preparation.
Cars were released in pairs at one-minute intervals rather than a massed start, beginning at 9am on a Monday, the previous day having hosted a motorcycle race.
Ralph DePalma in a Ballot made the strongest opening, though Murphy's Duesenberg and Joe Boyer's Duesenberg set the fastest early laps. By the end of lap two the order began to settle: Murphy led Boyer, followed by Ballot driver Jean Chassagne and DePalma. The Duesenberg cars held a braking advantage, while the Ballots handled corners more crisply; the Sunbeam-Talbot-Darracq machinery struggled with tyre and road-holding problems throughout.
Murphy built a near two-minute lead by lap seven. Chassagne overtook Boyer for second on lap nine. Murphy's pitstop at the end of lap ten did not cost him the lead, but Chassagne closed and took the head of the race during lap eleven. At half-distance Chassagne led Boyer, with Murphy third, ahead of Albert Guyot.
The decisive moments came in rapid succession. On lap 17, Chassagne made a pitstop to find his fuel tank had burst — he was out. On the very next lap, Boyer suffered a mechanical failure and retired as well. Murphy, inheriting the lead, held it to the finish. Behind him Guyot ran strongly until a stop for fuel and water on lap 28 ended in a restart struggle so exhausting that spectator Arthur Duray stepped in to help push-start the car, at the cost of clutch damage. DePalma finished second, with Jules Goux third in a two-litre Ballot.
Murphy's victory was the lone American Grand Prix winner in Europe for 45 years. The Duesenberg's performance — aided by superior hydraulic brakes that outclassed the friction brakes on the French and Italian machinery — demonstrated that the United States could produce world-class racing cars capable of competing at the highest level on European soil. The race also established Le Mans as a Grand Prix venue before its transformation into the home of endurance racing three years later.