the drivers returned to action on Saturday morning in clear weather. Ralf Schumacher complained of head and neck pain following his crash in the second session and was treated by his team's physiotherapist before being ordered to rest until Saturday. Nevertheless, he lapped quickest in the third practice session at 1:21.036, ahead of Villeneuve, Coulthard, Michael Schumacher, Sauber's Kimi Räikkönen, Irvine, Alesi, Frentzen, Panis and Trulli. After 13 minutes, Verstappen's engine failed, and laid oil at La Rascasse corner, Luciano Burti's Prost car had a mechanical failure that sent him veering into the Sainte Devote tyre wall and narrowly avoided hitting multiple stationary recovery vehicles with three minutes remaining. Burti was unhurt.
The delay to dry the oil at La Rascasse turn delayed the start of the fourth session by 10 minutes.
Qualifying
left|thumb|upright|[[David Coulthard (pictured in 2007) took the 12th pole position of his career and his second of the season.]]
Saturday's afternoon one hour qualifying session saw each driver was limited to twelve laps, with the grid order decided by their fastest laps. During this session, the 107% rule was in effect, which necessitated each driver to set a time within 107 per cent of the quickest lap to qualify for the race. Coulthard broke the unofficial track lap record set by Frentzen in 1997, and took his second pole position of the season, and the 12th of his career with a time of 1:17.430. He was joined on the grid's front row by Michael Schumacher who was 0.201 seconds slower after aborting his first timed lap because Bernoldi caught him off guard exiting the tunnel and he lost a tenth of a second by glancing the left-hand side at Le Portier turn. Häkkinen changed his car's set-up for a final timed run but it gave him excess understeer and a lack of front grip, leaving him third. Sixth-placed Irvine was delayed on his third timed lap and braked early for the Novelle Chicane. Alonso began ahead of both the Arrows cars and Burti's Prost in 18th. Marques, 22nd, had excess oversteer.
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Warm-up
A 30-minute warm-up session was held on Sunday morning in dry weather. Coulthard led the session with a time of 1:20.944, ahead of his teammate Häkkinen in second. The Ferrari cars of Michael Schumacher and Barrichello, Frentzen, Ralf Schumacher, Irvine, Verstappen, De la Rosa and Fisichella followed in the top ten. While the session passed relatively peacefully, Marques crashed into an Armco metal barrier at Anthony Noghes corner.
Race
The 78-lap race took place in the afternoon from 14:00 local time and before 100,000 spectators, over a distance of . At the start of the formation lap, an electronic launch control software glitch caused Coulthard's engine to stall, prompting the McLaren mechanics to restart his engine; he was required to begin from the back of the grid. His teammate Häkkinen was stuck behind him; he drove away before the final car passed him and was allowed to start from third place. Michael Schumacher was effective the first driver on the starting grid and made an unchallenged, clean start to lead the field into Sainte Devote, ahead of Häkkinen and Barrichello. Behind the two, Verstappen lost control of his car and made contact with Burti. Verstappen fell to 20th as Burti had one of his endplates removed.
thumb|upright|[[Rubens Barrichello (pictured in 2002) finished in second place]]
On the run to the exit of Portier corner, Heidfeld and Bernoldi collided, causing Heidfeld to be launched over one of Bernoldi's wheels, and sending him straight into a barrier, making him the race's first retirement on lap one. At the first lap's conclusion, Michael Schumacher led Häkkinen by 1.5 seconds; Bernoldi was able to remain close behind teammate Verstappen until an issue forced him to change onto a conservative fuel map and lose a small amount of pace. and Barrichello overtook him at the exit of the tunnel for second. On the same lap, Panis retired with a steering problem, and Häkkinen did the same two laps later because his problem persisted. by 0.431 seconds over Barrichello in a staged finish. ahead of the faster Villeneuve in fourth. Verstappen and Bernoldi followed in positions eight to nine.
Post-race
The top three drivers appeared in Prince Rainier III of Monaco's royal box to collect their trophies and appeared in the subsequent press conference to speak to the media. Barrichello stated his cramp disappeared after his pit stop, "I was asking God to give me a chance to race because the car was brilliant. I never had a car as good as this one of today. But as Michael was saying, I had to save so much because I couldn't do anything else." An audio tape released to the press by McLaren on 11 June vindicated Dennis; according to transcribers he said to Bernoldi, "that was not sporting and you shouldn't carry on like that." Bernoldi told Dennis he was following orders and was not required to allow Coulthard past since the latter was on the same lap as the former. Bernoldi argued he was driving a routine race and was on the circuit to better his driving ability. Jackie Stewart, the three-time Formula One World Champion and Jaguar team founder, praised Irvine's performance and the driver's maturity, "He practised well, he qualified well and he raced well. You couldn't ask for more. He proved himself here by driving in a very controlled way so he was ready to take advantage of opportunities and to resist any pressure from Jacques (Villeneuve) at the end." He declared the result "a great thing" for himself and Prost and said that he predicted similar results in the future, "I totally enjoyed my race. But towards the end, when I felt the car vibrating in the tunnel, I was really worried. It was a flat tyre and I had to go back to the pits to change it, which cost me the fifth place points. What is really important today is that I scored the first point for the team this year – or last."
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Notes
- – David Coulthard started the race from the back of the grid after stalling on the formation lap.
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;Constructors' Championship standings
{|class="wikitable" style="font-size: 85%;"
|-
! scope="col"|
! scope="col"|
! scope="col"| Constructor
! scope="col"| Points
|-
|align="left"| 10px
|align="center"| 1
| Ferrari
| 76
|-
|align="left"| 10px
|align="center"| 2
| McLaren-Mercedes
| 44
|-
|align="left"| 10px
|align="center"| 3
| Williams-BMW
| 18
|-
|align="left"| 10px
|align="center"| 4
| Jordan-Honda
| 13
|-
|align="left"| 10px 1
|align="center"| 5
| BAR-Honda
| 12
|-
!colspan=4|Sources: