In 1986, Mexico became the first country to host the World Cup twice, stepping in after the original hosts Colombia had to drop out in 1982. For the second time, the finals would feature twenty-four teams, but the second group stage was scrapped. Four third placed teams with the best records would accompany the top two from each group into the last sixteen.
Defending champions Italy opened up with a 1-1 draw against Bulgaria in Group A, and could not keep pace with an Argentinian side inspired by Diego Maradona. After a second draw with Argentina, Italy had to wait until their final match against South Korea to clinch their only win in the group and seal second place. Bulgaria benefitted from the change in format to reach the second round without winning a match after finishing third. Hosts Mexico faced a tight struggle to qualify from Group B, which was a three-horse race with Paraguay and Belgium. After an impressive opening win over Belgium, a 1-0 win over newcomers Iraq in their final match gave the host nation first place, while Paraguay drew with Belgium to ensure that both sides also went through.
France and the Soviet Union cruised through Group C ahead of Hungary and Canada, and Hungary's 6-0 defeat to the Soviets cost them a second round place as they finished third but went out on goal difference. Group D followed a very similar pattern with Brazil and Spain having no trouble getting past Algeria and Northern Ireland, who were both pale shadows of their teams of 1982. Brazil won the group with three wins out of three.
World Cup debutants Denmark were a revelation in Group E. They won all three matches, against Scotland, Uruguay and West Germany, the highlight being a 6-1 thrashing of Uruguay. West Germany won just once, against the Scots, but went through in second place after Uruguay and Scotland could only draw 0-0. Uruguay crept through to the second round without winning a match. Group F was very tense and tight. Portugal beat England in their opening match but lost both remaining games, their defeat to Morocco sealing their exit from the tournament. Morocco became the first African side to win a group, with England and Poland accompanying them into the next round after England's 3-0 win over the Poles.
In the second round, Mexico moved into their second quarter-final on home soil with a 2-0 win over Bulgaria, before Belgium twice came from behind to beat the Soviet Union 4-3 after extra-time in a remarkable match. Brazil thrashed Poland 4-0 to reach the quarter-finals, before Argentina got the better of fierce rivals Uruguay by the only goal. Italy's hold on the title ended with a 2-0 defeat to European Champions France, but West Germany's struggles continued when they needed an eighty-ninth minute goal to get past Morocco. As expected, England cruised past Paraguay 3-0 but Denmark, heavily fancied to beat Spain, fell apart in the second half and having led 1-0 lost by five goals to one, Emilio Butragueńo scoring four.
Three of the four quarter-finals went to penalty shoot-outs, with France, West Germany and Belgium edging through at the expense of Brazil, Mexico and Spain. In the other match, Argentina beat England 2-1 in a match famous for a moment of cheating and a moment of genius from Maradona. One handball goal and one magnificent run gave England too much to come back from. Maradona was again inspired as Argentina beat Belgium in the semi-final, and West Germany finally found some form to beat France again in a repeat of their 1982 meeting. France needed extra-time to beat Belgium to seal third place.
In the final, West Germany decided to man-mark Maradona in an attempt to keep him quiet, but although the tactic was successful they could not prevent Argentina taking control of the match. José Luis Brown gave them a half-time lead, and when Jorge Valdano doubled the lead the title seemed secure. West Germany fought back, and two late goals from Karl-Heinz Rummenigge and Rudi Völler looked as though they would force extra-time, but Maradona had the last word when he set up Jorge Burruchaga to score the winner with five minutes left. West Germany had lost their second final in a row, and Argentina were champions for the second time.