In their eighth year under head coach Bo Schembechler, the Wolverines finished the season with a 10–2 record, won the Big Ten Conference championship, and played in the 1977 Rose Bowl.

In the final game of the regular season, Michigan defeated Ohio State, 22–0, to win the Big Ten championship.

On offense, senior running back Rob Lytle was selected as the team's most valuable player, finished third in voting for the Heisman Trophy, and led the Wolverines with 1,469 rushing yards and 16 touchdowns.

On defense, Calvin O'Neal started all 12 games at middle linebacker, led the team with 139 tackles,[2] and was a consensus first-team All-American.

Wing back Jim Smith scored two touchdowns and netted 174 yards in the game, including gains on kickoff and punt returns, receptions, and reverse plays.

"[12][13] Split end Curt Stephenson later recalled the dinner:"A tray appeared with a big New York steak in front of the President.

Two days before the game, the schools' most famous alumni (Gerald Ford of Michigan and Jimmy Carter of the Naval Academy) faced off in a presidential debate.

The Associated Press reported that a survey of registered voters gave Ford a slight edge over Carter in the debate, but noted that things were "not expected to be that close" when the two schools met on the football field.

Place-kicker Bob Wood tied a Michigan record with a 41-yard field goal, his third of the season, and converted all nine extra point kicks.

[18] Harlan Huckleby rushed for 79 yards on 11 carries but did not score and left the game early after sustaining a shoulder injury.

[22] With the total, Lytle moved past Tom Harmon for fourth place on Michigan's all-time career rushing list.

[25] Fullback Rob Lytle rushed for 180 yards on 10 carries, including a 45-yard gain on a fake punt and a 75-yard touchdown run in the first quarter.

Playing at Dyche Stadium, the Wolverines scored 28 points in the second quarter, compiled 346 yard of total offense in the first half, and led 31-0 at halftime.

[29] With his performance against Northwestern, Lytle moved past Ron Johnson and into third place on Michigan's all-time rushing yardage list.

[31] For its seventh game of the year, Michigan defeated Indiana by a 35-0 score in cold, wet conditions at Bloomington.

[35][36] Harlan Huckleby gained 55 yards on 12 carries, including a six-yard touchdown run on an option pitch from Leach in the first quarter.

In the Toledo Blade, John Hannen wrote after the game that "Leach handles the option with the light fingers of a pick pocket" and opined that Michigan's combination of Lytle, Huckleby, Smith and Davis "may be the fastest backfield in collegiate history.

Later in the third quarter, Leach threw a 64-yard touchdown pass to Jim Smith, and Bob Wood kicked the extra point to give Michigan a 14–13 lead.

While Michigan's defense held, Rock Supan kicked a field goal on fourth down with four minutes remaining in the game.

Calvin O'Neal also intercepted a Kurt Steger pass late in the second quarter to set up Michigan's third touchdown of the half.

[50] Michigan concluded its home schedule with an average of 103,159 spectators per game, setting a new record for college football attendance.

Late in the second quarter, with the game still scoreless, Ohio State drove the ball to the Michigan 10-yard line when Pickens intercepted a pass in the end zone.

With its victory over Ohio State, Michigan advanced to play the USC Trojans in the 1977 Rose Bowl on New Year's Day.

In the first quarter, neither team scored, and USC's Heisman Trophy runner-up Ricky Bell was injured and unable to return to the game.

Michigan took a 6–0 lead on a one-yard touchdown run by Rob Lytle in the second quarter, but Bob Wood's extra point kick was blocked.

The Trojans moved down field on the next drive, and quarterback Vince Evans put USC in the lead on a one-yard touchdown run with a minute-and-a-half left in the first half.

[60] Press coverage of the game focused on Michigan's conservative, run-oriented offense and USC's more versatile attack.

The Big Ten's Rose Bowl representative, a stick-to-the-ground team ... just couldn't cope with the versatility of its Pacific-8 Conference opponent.

They are John Anderson (Green Bay Packers, 1978–1989), Ralph Clayton (St. Louis Cardinals, 1981), Russell Davis (Pittsburgh Steelers, 1980–1983), Walt Downing (San Francisco 49ers, 1978–1983), Jon Giesler (Miami Dolphins, 1979–1988), Chris Godfrey (New York Jets, 1980; New York Giants, 1984–1987; Seattle Seahawks, 1988); Curtis Greer (St. Louis Cardinals, 1980–1987), Mike Harden (Denver Broncos, 1980–1988; Los Angeles Raiders, 1989–1990); John Hennessy (New York Jets, 1977–1979), Dwight Hicks (San Francisco 49ers, 1979–1985, Indianapolis Colts, 1986), Harlan Huckleby (Green Bay Packers, 1980–1985), Mike Jolly (Green Bay Packers, 1980–1983), Mike Kenn (Atlanta Falcons, 1978–1994), Rob Lytle (Denver Broncos, 1977–1983), Doug Marsh (St. Louis Cardinals, 1980–1986), Greg Morton (Buffalo Bills, 1977), Calvin O'Neal (Baltimore Colts, 1978), Mel Owens (Los Angeles Rams, 1981–1989), Tom Seabron (San Francisco 49ers, 1979–1980), St. Louis Cardinals, 1980), and Ron Simpkins (Cincinnati Bengals, 1980–1986, Green Bay Packers, 1988), and Jim Smith (Pittsburgh Steelers, 1977–1982, Los Angeles Raiders, 1985).

[70] A 22nd player, Rick Leach, was drafted by the Denver Broncos, but opted instead to play Major League Baseball for the Detroit Tigers.