The 1986 Australian Grand Prix was a Formula One motor race held on 26 October 1986 at the Adelaide Street Circuit, Adelaide, Australia. It was the sixteenth and final race of the 1986 Formula One World Championship. The race decided a three-way battle for the Drivers' Championship between Brit Nigel Mansell, driving a Williams-Honda; his Brazilian teammate Nelson Piquet; and Frenchman Alain Prost, driving a McLaren-TAG.

Mansell took pole position for the race, but a poor start off the grid enabled teammate Piquet, Ayrton Senna and Keke Rosberg to overtake him and demote him to fourth by the end of the first lap.

A few laps into the race, Finland's Keke Rosberg, in his final Grand Prix, took the lead from Piquet. However, the Finn retired with a puncture on lap 63, handing the lead back to Piquet and elevating Mansell into third place, which would have been sufficient to secure the championship. One lap later, Mansell's race ended as his left-rear tyre exploded on the main straight with 19 laps remaining. The title was then between Piquet and Prost with the latter needing to finish ahead of the former to successfully defend his title. Following the tyre failures of Rosberg and Mansell, the Williams team called Piquet in for a precautionary tyre change leaving him 15 seconds behind. He made a late charge to close the gap to 4.2 seconds but Prost took victory to win his second of four titles.

It was not until the 2007 Brazilian Grand Prix that there were again three possible drivers' title contenders entering the final race of the season.

This was the final Grand Prix for 1980 World Champion Alan Jones and for 1982 World Champion Keke Rosberg.

Going into the race, three drivers were in contention for the World Championship. Nigel Mansell, driving a Williams-Honda, led with 70 points, while reigning champion Alain Prost, driving a McLaren-TAG, was second on 64 and Mansell's teammate Nelson Piquet was third on 63.

The Williams-Honda was superior in speed to the McLaren-TAG, with Mansell and Piquet having won nine of the previous fifteen races between them, and the team sealing the Constructors' Championship at the Portuguese Grand Prix in late September. However, Mansell and Piquet had been battling with one another and had taken points from each other on a number of occasions, while Prost's consistency had seen him accumulate points all year and thus remain in touch with the Williams drivers.

After being outscored by Piquet and Prost at the preceding Mexican Grand Prix, Mansell therefore failed to prematurely secure the Drivers' Championship. Nonetheless, he went into the race in the strongest position among the three title contenders as he only needed a third place to win the championship, as opposed to his title rivals who needed to win the race in order to keep their respective title hopes alive. It was the first time in two years that the championship was decided at the final round and the first time since 1983 that three drivers were still in contention for the Drivers' Championship at the season finale. Mansell had the opportunity to both winning his first Drivers' Championship overall and becoming Britain's first World Drivers' Champion since James Hunt in 1976. If Prost won, he would have successfully defended his title, while Piquet had the chance to win his third world championship overall, becoming Brazil's most successful Formula One driver by the number of Drivers' Championships in the process, as he was tied with Emerson Fittipaldi, who won the drivers' title in 1972 and 1974.