Max Biaggi rode a near perfect German Grand Prix to take his first victory of the season and close to within 1 point of new world championship leader Valentino Rossi.
Biaggi led from pole position for the first 15 of the 30 laps, with Rossi and Gibernau trailing after Suzuki's Kenny Roberts began to fade from the lead group.
However, Gibernau would fall from his Telefonica Honda for the second race in succession - on lap 9 - after losing the front of his RCV, casting doubt on his championship dreams. Sete would leave Germany third in the standings and 13 points behind Rossi.
Gibernau's departure would provide the top two with a brief gap over the rest of the field, but it was soon filled by fast closing Repsol Honda team-mates Nicky Hayden and Alex Barros.
Barros overtook Hayden just before the halfway stage and was soon stalking Rossi for second – prompting the Yamaha star to finally make his move on Biaggi, the #46 outbraking the Camel Honda into turn one on lap 16.
However, Rossi couldn't break away and with Biaggi riding wheel-perfect Barros couldn't squeeze past either. Instead, Biaggi would retake the lead with seven laps to go, while Rossi would also allow Barros through after his M1 began kicking around later on the same lap.
Hayden then outbraked Rossi into turn one with 6 laps to go, but all eyes were now on the battle for victory, with Barros sliding aggressively as he desperately searched for a way past Biaggi.
However, the Roman absorbed all pressure, kept his lines perfectly and went on to win by 0.349secs, while Hayden just held off Rossi to make it an all-Honda podium.
Indeed, Rossi would be the only Yamaha to finish after team-mate Carlos Checa crashed out of third on lap 4, moments after passing Gibernau for third.