For 1977, Lotus retained Nilsson alongside Andretti, and the pair worked on developing the new ground-effect Lotus 78. After a slow start to the season, as Andretti took over his car for the Argentine Grand Prix, Nilsson really got going at Jarama with a 5th place. Two races later, he took a magnificent win at the rain-soaked Zolder. As the race progressed, and the track dried, Nilsson suffered from a vibrating wheel nut, therefore he made a stop to have a tyre change. On these new tyres, he drove around the outside of Niki Lauda's Ferrari with 20 laps to go, to take the lead and stayed ahead to take victory. With further good results at Dijon-Prenois (4th) and Silverstone (3rd) Nilsson climbed the Championship standings. Come Autumn, his performance was blighted by poor qualifying efforts and there was a sudden downturn in his performances, retiring from all the last seven rounds of the Grand Prix season.