Diniz remained at Arrows for 1998, partnered by Mika Salo. Diniz endured a torrid start: his car suffered gearbox problems in the opening three rounds and endured engine failures in the races at San Marino and Spain. He scored his first point of the season with a sixth-place finish in Monaco and managed to finish the races in Canada and France. Diniz suffered three more consecutive retirements, and finished the races in Hungary and Belgium, in eleventh and fifth respectively. Diniz finished the season by retiring in the final three races. He finished 14th in the Drivers' Championship, and was tied on points with team-mate Salo.