The 1978 Italian Grand Prix at Monza started badly for Peterson. In practice he damaged his Lotus 79 race car beyond immediate repair and bruised his legs in the process. Team Lotus had a spare 79, but it had been built for Andretti, and the taller Peterson did not fit comfortably inside. The team's only other car was a type 78, the previous year's car, which had been dragged around the F1 circuit that season with minimal maintenance.
At the hospital, Peterson's X-rays showed he had about 27 fractures in his legs and feet. After discussion with him, Peterson was sent to intensive care so that the surgeons could operate to stabilize the bones. There was some level of dispute between the doctors regarding whether all fractures should be immediately fixed or not. During the night, Peterson's condition worsened, and he was diagnosed with fat embolism. By morning he was in full kidney failure due to the embolism, and was declared dead at 9:55 am on 11 September 1978.
His teammate Mario Andretti clinched the championship at the race. "It was so unfair to have a tragedy connected with probably what should have been the happiest day of my career", Andretti said, "I couldn't celebrate, but also, I knew that trophy would be with me forever. And I knew also that Ronnie would have been happy for me". Peterson took second place in the 1978 drivers' standings posthumously.