In the preliminary round, the 18 teams were split up into four groups. Two of the groups had five teams each, with the others having four each. Romania withdrew, leaving 2 groups of 5, 1 group of 4, and 1 group of 3. The top two teams in each group advanced to the semifinal round. The seven teams that had placed third and fourth moved into the classification rounds, leaving one more spot in that round two be contested in a head-to-head match between the two fifth-place teams.
The two fifth-placed teams from the preliminary groups, Denmark and Luxembourg, played a single elimination game for the honor of being the eighth team in the consolation round. The game was perhaps the closest in Eurobasket history; it was tied at 45–45 with Peter Tatalls at the free throw line with 5 seconds left. Tatalls made the shot, putting Denmark ahead 46–45. Luxembourg moved the ball up to about half-court before attempting a shot just before time expired. The shot bounced off the rim, eliminating Luxembourg from the tournament and giving Denmark their first win of the tournament as they moved into the classification round to play for 9th–16th places.
The first classification round was played in two round-robin groups. Teams advanced into the second classification round depending on their results in the first round—first and second place teams played in the 9–12 segment of classification round 2 while third and fourth place teams played for 13th to 16th places.
The semifinal round was played in two round-robin groups. Teams advanced into the final round depending on their results in the first round—first and second ranked teams played in semifinal games in the final round, competing for the medals and fourth place, while third and fourth ranked teams played for 5th to 8th places.