The win moved Mansell ahead of Ayrton Senna, who finished fifth in his Lotus-Honda, into second place in the Drivers' Championship, albeit 18 points behind Piquet with three races remaining.
Nelson Piquet secured his 24th and final F1 pole position in his Williams-Honda with Nigel Mansell completing an all-Williams front row.
The battle for third (then second) was led for much of the time by Ayrton Senna, who like the previous year tried to complete the race without changing tyres.
Senna had a queue of both Ferraris, Prost's McLaren and Thierry Boutsen's Benetton behind him, which was joined by Piquet after a long pit-stop.
The Lotus-Honda was very fast in a straight line with a low downforce setup, but was slow through Jerez's many twists and turns as a result.