Team Canada was built by Montreal Canadiens general manager Sam Pollock and coached by Scotty Bowman. It boasted one of the strongest lineups ever assembled, including Bobby Orr and Bobby Hull, who had missed the 1972 Canada-Russia Summit Series (Orr due to injuries and Hull because he had left the NHL for the World Hockey Association and was thus ruled ineligible). The roster also boasted 15 additional Honoured Members including Bobby Clarke, Phil Esposito, Guy Lafleur, Gilbert Perreault and Darryl Sittler. The Soviet Union, on the other hand, was a team in transition after losing the 1976 World Championship to Czechoslovakia. Many familiar names from 1972 were gone, including Valeri Kharlamov and Vladimir Petrov.

The tournament opened in Ottawa on September 2 with Team Canada scoring an easy 11-2 victory over Finland. Victories followed against the United States (4-2) and Sweden (4-0), but Canada's hopes of an undefeated tournament were dashed on September 9 with a 1-0 loss to Czechoslovakia. Vladimir Dzurilla earned the shutout, while Milan Novy scored the lone goal. Canada rebounded for a 3-1 win over the Soviets two nights later and finished the round-robin portion of the tournament in first place with a record of 4-1-0. The Czechs had dropped a surprising 2-1 decision to Sweden, but still advanced to face Canada in the finals on the strength of a 3-1-1 record.

Despite Dzurilla's initial success against Canada, he was pulled after allowing four goals in the first period in game one of the best-of-three finals. Jiri Holecek finished up in a 6-0 Canadian victory. Dzurilla then replaced Holecek after he surrendered two early goals in game two and was brilliant in a 4-4 tie through regulation time. At 11:03 of overtime, Darryl Sittler streaked down the left side of the Montreal Forum ice and, with a slight deke, slipped the puck past Dzurilla for the Canada Cup-winning goal.

The star of the tournament for Team Canada was Bobby Orr, who enjoyed a final turn in the spotlight before repeated knee injuries ended his brilliant career. Orr had two goals and seven assists for nine points in seven games (tying Viktor Zhluktov of the Soviet Union and teammate Denis Potvin for the scoring lead) and was named the tournament's Most Valuable Player.