The third cycle of the European Championship had been scheduled for 1965. As in 1961, six teams entered a double round robin competition of which two (USSR and Yugoslavia) qualified by default and four won their respective preliminaries. The preliminary stage did not bring major upsets. Hungary and Romania qualified from the Eastern European group at the expense of Bulgaria and East Germany while the Netherlands overcame Spain easily. USSR were as usual major favourites for gold although they were missing Tal, Spassky, Geller, Keres and Polugaevsky. Hungary and Yugoslavia were preparing for a close battle for silver, sending their strongest line-ups to Hamburg.

Hungary made a huge step towards silver beating Yugoslavia in the very beginning. The Soviets took sweet revenge for the Tel Aviv 1-3 debacle and beat West Germany by 6½-3½. The 8-2 win over Romania in round two let the Soviets leave the opposition far behind and they strengthened their lead by consecutive 6-4 wins over Yugoslavia and Hungary. USSR were in a clear lead after the first cycle with 34 points ahead of Yugoslavia - 29 and Hungary - 28. West Germany were lying fourth ahead of Romania. Day six saw the Hungarians beating Yugoslavia again and both teams leveled on points. In round 8 the Soviets beat Yugoslavia 7-3 and virtually sealed the gold medals. Hungary fought hard to overtake Yugoslavia defeating the Soviets sensationally in the penultimate round thanks to Szabó's magnificent win over Botvinnik and Bilek's win over Korchnoi. With the last round to go Hungary and Yugoslavia were in tied second and they both won last round's matches by 6½-3½. Both teams finished with 57 points then and Yugoslavia were awarded silver medals on the basis of a special tie-break. By many this was considered unfair since the Hungarians had an excellent match point record (nine wins and only one loss) and had won both matches vs Yugoslavia. The controversial tie-breaking method had soon been abolished. Caissa, the goddess of chess, soon settled the score. One year later, at the Havana Olympiad, Hungary and Yugoslavia came in tied third. Hungary were awarded bronze medals on the basis of a verdict by the jury, who decided to use unweighted Berger (not weighted, as many suggested).

The Soviets' lead over the chasing group was impressive (as usual) but Botvinnik's three consecutive losses were the sensation of the event. Never before and never after did Botvinnik lose three games in a row against non-Soviet players. Also, after an excellent first-cycle performance (4½/5) Viktor Korchnoi, the hero of the 1957 and 1961 championships, had a dreadful second cycle performance (1/4). The best percentage results were achieved by bottom board players: Boleslavsky and Lein. Gligorić, who courteously gave the right to play on the top board to Ivkov, produced the best performance of all Yugoslav players. The Hungarians won two individual prizes for best board scores (Barcza and Forintos) and Portisch (their top board) avoided a single loss. West Germany easily took fourth spot despite Unzicker's poor play (=7-3) that was compensated for by Schmid's excellent show. Romania came fifth (only two players achieved 50% results and nobody scored better) and the Netherlands came sixth losing all 10 matches (Donner's 5½/10 was the only consolation).