This was the final running of the Long Beach race as an F1 event, before organizer Chris Pook switched to the CART IndyCar series.
René Arnoux (Ferrari) was the first to go over the bumps flat out and his 1:26.935 led Alain Prost (Renault), Patrick Tambay (Ferrari) and Riccardo Patrese (Brabham) on the day's timing chart, while Nelson Piquet (Brabham), Lauda and Watson found their Michelin qualifying tires virtually useless and set poor times.
Making what would be an abortive comeback to Formula One, Australia's 1980 World Champion Alan Jones took Chico Serra's drive in the No.30 Arrows-Ford.
Still recovering from a broken hip requiring a pin, the result of falling off a horse on his farm north of Melbourne, Jones qualified in a creditable 12th place for his first F1 GP since winning the final race of the 1981 season at Caesars Palace in Las Vegas.
When Cheever entered the Renault pit for a new set of tires, however, he found the crew still working on Prost's car; he was forced to continue.
The top six cars were all running very close together, and Rosberg soon found himself under increasing pressure from Laffite, who was in turn being hounded by Jean-Pierre Jarier's Ligier and Patrese's Brabham.
Arnoux was coming back through the field after a second tire stop, and was waging battle with Cheever for fifth place when they came upon Laffite on lap 67, again at the end of Shoreline Drive.
Semi-retired 1980 World Champion, Australian Alan Jones replaced regular Arrows driver Chico Serra for the race in what was to prove to be a short-lived comeback to Formula One.
Jones, who had only raced at home in Australia since retiring from F1 following the 1981 season, was still suffering the effects of a fall from a horse on his farm a couple of months earlier where he had broken his hip.
Lauda, suffering from a worsening cramp in his right leg, could not challenge Watson in the later stages, and the Ulsterman came home nearly half a minute ahead for his fifth victory.
Despite tremendous success since the race's inception in 1976, and the observable impact of the global exposure it brought to the city and to the Los Angeles area in general, the organizers believed that the less expensive and more popular (in the United States at least) CART championship, dominated by American drivers, would be a more promising investment.