McLaren-Honda continued the dominant form it had established at the opening races of the season. Senna took pole position by an almost unbelievable margin of 1.5 seconds over Prost, with Gerhard Berger a further 1.2 seconds back in third in his Ferrari. Berger's Ferrari teammate Michele Alboreto was fourth, while Nigel Mansell qualified fifth in the Williams β the quickest naturally-aspirated car, yet some 3.6 seconds adrift of Senna. The top ten was completed by Alessandro Nannini in the Benetton, Derek Warwick in the Arrows, Riccardo Patrese in the second Williams, Eddie Cheever in the second Arrows, and Jonathan Palmer in the Tyrrell. Among the non-qualifiers was Satoru Nakajima, whose Lotus was powered by the same Honda turbo engine as the McLaren.
At the start, Senna led away immediately. Behind him, Berger overtook Prost when the Frenchman momentarily failed to engage second gear. Further back, a series of incidents occurred at Sainte-Devote: Alex Caffi hit the wall in his Dallara, Philippe Streiff retired when an accelerator cable broke on his AGS, and former World Champion Nelson Piquet collided with Cheever β forcing Piquet to retire at the end of the first lap and capping a disastrous weekend for the Lotus team.
The running order of Senna, Berger, Prost, Mansell, Alboreto, and Nannini held until lap 33, when Alboreto made contact with Mansell at the Swimming Pool section and ended the Englishman's race. Nannini then retired with a gearbox failure on lap 39. On lap 51, Patrese collided with Philippe Alliot's Lola while attempting to lap him; Alliot retired immediately.
On lap 54, Prost passed Berger for second place on the run to Sainte-Devote, though he remained some 50 seconds behind Senna. In an effort to apply psychological pressure on his teammate, Prost began trading fastest laps with him. With eleven laps remaining, McLaren team boss Ron Dennis radioed Senna, asking him to slow down and secure a safe 1-2 finish. Senna complied, and Prost recovered six seconds.
On lap 67, Senna lost concentration at the tight Portier corner and drove his McLaren into the barrier, damaging the car's front suspension and ending his race. He had led from the opening lap and been in complete control throughout. After the crash, Senna immediately left for his home in Monaco to reflect on what had happened; the McLaren team did not hear from him until that evening, when he walked quietly into the pits as the crew was packing up. Senna later described the incident as a moment where he had entered a state of transcendence during qualifying the previous day, frightened himself, and lifted β suggesting his mind had been disturbed even before the race-day crash.
With Senna out, Prost inherited the lead and took victory for his fourth Monaco win in five years, marking his 30th career win. Berger finished second some 20 seconds behind, with Alboreto a further 21 seconds back in third β scoring his 20th podium finish. Warwick finished fourth after a race-long battle with Palmer, while Patrese recovered from his earlier collision to take the final championship point, passing the other Lola of Yannick Dalmas on the final lap. Patrese's point was the first-ever World Championship point scored by a Judd-powered car and his first championship point for Williams. It was McLaren's 58th win, 150th podium, and 40th fastest lap, and Honda's 30th win as an engine supplier.
The 1988 Monaco Grand Prix endures as one of the most analysed events in Formula One history. It encapsulates both the dominance and vulnerability of Senna's driving style: a qualifying lap widely regarded as perhaps the greatest single lap ever driven, followed by a race that was entirely in his control until a momentary lapse. The race also set the stage for the intense Senna-Prost rivalry that would define the 1988 and 1989 seasons, with the incident reinforcing contrasting perceptions of each driver's temperament under pressure.