Damon Hill celebrated his 14th grand prix victory after winning the last Australian Grand Prix to be held at Adelaide. The victory was academic as arch-rival Michael Schumacher had already wrapped up the championship but the margin of Hill's victory was mightily impressive, the Williams driver winning by a clear two laps from second-placed Olivier Panis in his Ligier. It was only the second time in the history of the world championship that such a margin of victory had been achieved, the first being Jackie Stewart's dominant victory in the 1969 Spanish Grand Prix when he beat Bruce McLaren by a similarly huge margin. The margin of his victory was aided, however, by the retirement of Williams team-mate David Coulthard and a collision involving Michael Schumacher and Jean Alesi. "A surfer I met before the race taught me the phrase 'too easy mate' and it sums up this race," said Hill afterwards. "I was saying it in the car to myself. It was strange because I was all keyed up for a tough battle but in a country famous for flies they all just dropped away like flies!"
Honda Racing announced that Ross Brawn would join the team in the role of Team Principal with full responsibility for designing, manufacturing, engineering and racing Honda's Formula One cars. On the same day, Ferrari announced that from January 1, 2008 Stefano Domenicali would take on the role of director of Ferrari's Gestione Sportiva, a position held - on an interim basis - by Jean Todt.
Rubens Barrichello, Tony Kanaan and Mario Haberfeld teamed up to win the Granja Viana kart race in Sao Paulo. The race, which lasted for over six hours, attracted over 100 entries including F1 drivers Enrique Bernoldi and Ricardo Zonta.