Brazilian Nelson Piquet finished second in a Brabham-BMW, having started from pole position, with Italian Michele Alboreto third in a Ferrari.

The win, Lauda's fourth of the season, gave him the lead of the Drivers' Championship by 4.5 points from his French teammate Alain Prost, who spun out shortly after half distance.

This caused 3rd fastest qualifier Elio de Angelis to hesitate badly off the line and his Lotus-Renault was almost hit from behind by several cars and saw the Toleman-Hart of Ayrton Senna in 4th place by the time they reached Hella-Licht after starting 10th.

Alain Prost, Lauda's team mate and the World Championship leader going into the race, failed to finish after spinning off on oil at the Jochen Rindt Curve on lap 28, that came from the Lotus of Elio de Angelis when his Renault engine failed moments before Prost retired (de Angelis later received criticism for continuing to drive his car on the racing line while dropping oil).

Another Austrian driver Gerhard Berger, who would go on to win 10 Grands Prix before retiring at the end of the 1997 season, made his Formula One debut at the Österreichring, finishing 12th and last in his ATS-BMW.