Michael Schumacher led the World Drivers' Championship heading into Germany with 84 points, 37 ahead of David Coulthard and 50 clear of Barrichello in third. Ferrari led the Constructors' Championship over McLaren by 52 points. The race was one of two held in Germany that season, following the European Grand Prix at the Nürburgring in June. The event attracted an attendance of approximately 100,000 spectators and was run over the 6.825 km Hockenheimring layout — the last time the German Grand Prix would be held on that configuration before the circuit was redesigned for 2002.
A notable personnel change preceded the event: Heinz-Harald Frentzen was dismissed by Jordan mid-season and replaced by Ricardo Zonta for this race and the rounds that followed. Several teams brought aerodynamic updates, with Williams, Ferrari, Jaguar, Sauber, and Prost all fitting revised front wings.
Juan Pablo Montoya claimed his first Formula One pole position with a lap of 1:38.117, setting a new track record. His Williams-BMW teammate Ralf Schumacher was just 0.019 seconds behind him, making it the first all-Williams front row since the 1997 British Grand Prix. Mika Häkkinen qualified third for McLaren, with Michael Schumacher fourth. Barrichello managed sixth after a spin prevented him from improving his time further.
As the field prepared for the formation lap, Fernando Alonso and Tarso Marques started from the pit lane due to fuel leaking from their refuelling valves. On the grid, Michael Schumacher's Ferrari developed a gearbox selection fault during the parade lap. At the start, unable to change out of first gear, his car slowed sharply in the middle of the circuit. Luciano Burti, driving for Prost, was unable to avoid the stationary Ferrari — his view blocked by Olivier Panis and with Zonta moving left — and struck Schumacher's right-rear wheel, launching into the air and barrel-rolling over Enrique Bernoldi's Arrows before landing upright. Burti's detached front wheel struck Bernoldi's engine cover and rear wing.
FIA race director Charlie Whiting deployed the safety car and then red-flagged the race when the volume of carbon-fibre debris scattered across the track posed a tyre puncture risk. Both Schumacher and Burti were uninjured and switched to their teams' spare cars. The race restarted at 14:24 local time.
Montoya and Ralf Schumacher again held first and second off the restart line. Further back, Pedro de la Rosa lost control of his Jaguar at the Clark chicane and struck Nick Heidfeld's Sauber, eliminating both from the race. Michael Schumacher advanced from fourth to third by passing Häkkinen through the stadium section. Barrichello passed Coulthard on the outside for fifth.
Montoya began to pull away from Ralf Schumacher, setting the fastest lap of the race — 1:41.808 — on lap 20. By lap 15 he led by 8.3 seconds. The race's outcome turned on lap 22 when a regulator failure caused Montoya's pit box signal lights to stop functioning; the Williams refueller inadvertently attached to Ralf Schumacher's fuel rig, leaving Montoya stationary for approximately 20 seconds longer than planned and filling his car with one and a half times the intended fuel load. Ralf Schumacher inherited the lead.
Michael Schumacher made his single scheduled pit stop on lap 23 but retired immediately after rejoining with a fuel pump pressure failure. Montoya retired on lap 25 with engine failure, eliminating any threat to Ralf Schumacher. Coulthard made his stop on lap 28 and departed immediately with a blown engine, removing both McLarens from the points.
Ralf Schumacher controlled the remainder of the race despite a brake issue that had troubled him from the opening laps, winning by 46.1 seconds. Barrichello survived a delayed stop on lap 33 — a closed fuel hose forced Ferrari to switch equipment, costing twelve seconds — to take second. Villeneuve, in the faster BAR, claimed third.
Ralf Schumacher described the win as "a great feeling" on home ground. The result was his third victory of the 2001 season and of his Formula One career. Michael Schumacher retained his championship lead despite retiring; Ralf Schumacher moved ahead of Barrichello to take third in the standings. Ferrari's 124 points kept them comfortably ahead of McLaren and Williams in the Constructors' Championship, with five rounds remaining. The 2001 German Grand Prix was the last Formula One race held on the classic 6.825 km Hockenheimring layout; the redesigned, shorter circuit debuted in 2002.
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