At Sydney, December 30, 31, January 1, 2. Australia won by an innings and 55 runs with more than a day to spare. This was West Indies' first defeat since they lost, also to Australia, at Melbourne 27 Tests earlier in the 1981-82 series. It was their first by an innings since 1968-69, also at Melbourne. The architects of such a complete reversal were the Australian spinners, Holland and Bennett, who had bowled New South Wales to victory over the West Indians earlier in the season. They again fully exploited a turning pitch and the uncertainty of the West Indian batting in such conditions.
West Indies contributed to their own demise by omitting their one specialist spinner, Harper, from their side, in spite of the overwhelming evidence all season that the Sydney pitch encouraged spin. Afterwards Lloyd admitted the selection was a mistake, although he himself, in his 110th and final Test, fought bravely in both innings to save his team.
Following two days of persistent rain that left the pitch damp, Australia chose to bat first, but soon lost Hilditch to Holding, who, recovered from the muscle strain that kept him out of the previous two Tests, had returned as Harper's replacement. But gully escapes for Wood when 6 and Wessels when 13, and a missed opportunity to run out Wessels as soon as he came in, were early indications that the luck had swung Australia's way. There was some life in the pitch throughout the first day when Wood was hit on the helmet by Marshall and Ritchie, after taking a nasty crack on the cheek from Walsh, was forced to retire. But it was never fast and Australia steadily built their highest total of the series. Wessels led the way with his fourth Test century, batting just over eight hours before he chopped Holding into his stumps soon after tea on the second day. He would have hit more than fourteen 4s but for a sluggish outfield. Rain reduced the second day by an hour and a quarter and delayed the end of Australia's innings until an hour into the third day.
West Indies struggled throughout their first innings and were following on before the end of the day. McDermott dismissed Greenidge and Richardson, but Holland was the chief destroyer. Among his six victims were Richards, who edged a sharp leg-break to slip, and Lloyd, who was caught off bat and pad just when he and Dujon were threatening a counter-attack.
Richards and Lloyd both batted with skill and determination in the difficult conditions in the second innings, Richards for a little over two hours before Bennett deceived him with a superb faster ball, Lloyd for two and a quarter hours before he punched a hard, low catch to extra-cover off McDermott. As Lloyd left a Test ground for the last time, he received a standing ovation from the crowd of almost 25,000.
Relations between the teams, already strained following incidents earlier in the series, were further affected by a verbal clash between Richards on the one hand and Rixon and Border on the other, following an unsuccessful appeal against Richards in the first innings. The umpires reported the matter to the Australian Cricket Board, but no action was taken against the players involved.
Marshall, with 28 wickets in spite of his lack of success in this match, was voted Man of the Series.