The race was won by Niki Lauda (Brabham-Alfa Romeo), after both Mario Andretti (Lotus-Ford) and Gilles Villeneuve (Ferrari), who had finished first and second, were given a one-minute penalty and dropped to sixth and seventh.

Andretti took pole position alongside Gilles Villeneuve on the front row (Ferrari), with Jean-Pierre Jabouille (Renault) in third place, Lauda in fourth, and Peterson in fifth.

James Hunt was overtaken on the right-hand side by Riccardo Patrese, and Hunt instinctively veered left and hit the rear right wheel of Peterson's car, with Vittorio Brambilla, Hans-Joachim Stuck, Patrick Depailler, Didier Pironi, Derek Daly, Clay Regazzoni, and Brett Lunger all involved in the ensuing melee.

Non-starters included Peterson and Brambilla who were taken to Niguarda hospital, Stuck who was not allowed to restart due to him suffering from slight concussion after being struck on the head by a flying wheel in the startline crash, Pironi (as the Tyrrell team had one spare car and that was set up for Depailler), and Lunger who had no spare car available.

During the red flag, three time world champion and ABC Sports commentator Jackie Stewart interviewed Andretti and he said "Yeah, it couldn't be worse.

While driving from the pit lane to the grid, Jody Scheckter's Wolf lost a wheel and crashed at the second Lesmo curve, bending the Armco barrier that was situated right next to the track.

Some of the drivers had seen the accident, got out of their cars, and rushed across to race control to get the second start delayed as the Armco barriers were leaning over perilously where Scheckter struck it.

Prior to the restart, Jackie Stewart interviewed Andretti and he said "it's no time to feel like celebrating, it just lost it's impact, there's no question about it for me.

Jabouille had engine problems after six laps and Lauda took on the pursuit; meanwhile, race control gave Villeneuve and Andretti a one-minute penalty as they were judged to have jumped the start.

With Jabouille having retired, Lauda finished third ahead of Watson (Brabham), Reutemann (Ferrari), Jacques Laffite (Ligier-Matra), and Patrick Tambay (McLaren-Ford).

The race was also notable for the first finish for Nelson Piquet with a creditable ninth after dodging the Peterson wreckage in the first start.

At the hospital, Peterson's X-rays showed he had a total of twenty seven fractures in both legs according to the newly appointed Formula One doctor Sid Watkins in his 1996 autobiography Life at the Limit.

Ronnie's wife Barbro was in Monaco and she was contacted by Team Lotus boss Colin Chapman an hour after the crash.

[5] Over the phone, professor Watkins reassured Barbro that he thought that Peterson would recover, with plans being made for her to get to Milan in the morning.

Bernie Ecclestone, who was flying his private jet, got permission to land in the dark at Nice Côte d'Azur Airport.

It was past midnight, so Chapman and Andretti decide to go back to Villa d'Este in Como where they were staying during the race weekend.

Arriving at the intensive care unit, the neurosurgeon informed them that Peterson had developed breathing problems and was being ventilated by a machine in an attempt to keep his blood oxygen levels normal.

An X-ray showed that he had developed multiple emboli in his lungs, which had come from the fat in the bone marrow entering his bloodstream; due to this, his kidneys had started to fail.

Professor Watkins, inspecting Peterson's eyes, identified fat globules obstructing the small arteries in the retinas.

It would be broadcast before same-day coverage of the 75-lap Michigan International Speedway USAC Championship Trial event that Andretti (who alternated with rookie Rick Mears in the Gould Charge for Team Penske during the season) was supposed to have participated, where broadcaster Jim McKay noted, "Later Peterson would die, but not until the next morning.

"[9] At Michigan for the Gould 150 which featured both a 150-mile USAC race and a 100-mile IROC VI round, Andretti was asked about Peterson and he said: "His sincerity I learned to really appreciate that more than anything else and the man is competitive as he was with his skills and I found that this is something that many people in this business like because it's a very selfish business that's basis but he could share with me the basic of the car whatever he found, he changed something even if it was the better."

Initially, Andretti had also thought about appealing the penalty, and felt sure he would win it; Lauda himself had given him the Grand Prix's trophy, which he still owns.

The funnel effect from the wide starting area running into that first narrow corner could be eliminated and that certainly could have contributed to this accident, another contributing factor was the untidy start, the starter certainly did not withdrew the correct procedure and therefore was bunching taking place into that first dreadful area approaching the first corner but really I can't say truthfully that Monza should be no longer allowed for Grand Prix racing".

In 1998 Speedvision aired a piece of the domination of the Lotus team and the death of Peterson during the build up to the 1998 Italian Grand Prix.