Second round

In the all-European Group A, the Netherlands got off to a flying start by thrashing Austria 5-1, Johnny Rep scoring two of their goals. In a rematch of the 1974 final, the Dutch then drew 2-2 with West Germany, who had previously shared a goalless game with Italy. The Italians beat Austria 1-0, and so the Netherlands faced Italy in their last group game knowing that the winners would reach the final. Erny Brandts scored an 18th-minute own goal to put Italy ahead at half-time, but he made up for his mistake by scoring at the right end in the fifth minute of the second half. Arie Haan got the winner for the Dutch with 15 minutes remaining, and the Netherlands had reached their second successive World Cup Final. West Germany were surprisingly beaten by Austria 2-3 which marked their end as World Champions.
Group B was essentially a battle between Argentina and Brazil, and it was resolved in controversial circumstances. In the first round of group games, Brazil beat Peru 3-0 while Argentina saw off Poland 2-0. Brazil and Argentina then played out a tense and violent goalless draw, so both teams went into the last round of matches with three points. Argentina had an advantage that their match against Peru kicked off several hours after Brazil's match with Poland. Brazil won their match 3-1, so Argentina could know that they had to beat Peru by four clear goals to go through to the final. Argentina managed it with what some saw as a suspicious degree of ease. Trailing 2-0 at half-time, Peru simply collapsed in the second half, and Argentina eventually won 6-0. Brazil spread dark rumours suggesting that Peru might have been somehow illicitly induced not to try too hard (especially because the Peruvian goalkeeper, Ramón Quiroga, was born in Argentina); but nothing could be proved, and Argentina met the Netherlands in the final. Brazil, denied a final place by Argentina's 6-0 win over Peru, took third place from an enterprising Italy side and were dubbed "moral champions" by coach Cláudio Coutinho, because they did not win the tournament, but did not lose a single match either.