The 1989 season saw Formula One return to a full field of normally aspirated engines with the outlawing of Turbochargers.

Instead of returning to Ford power, Lotus signed a contract with John Judd for supply of his 3.5 litre V8 engine, along with Brabham, March and Eurobrun, though Lotus had exclusive supply of a 5 valve per cylinder unit.

The regulation change called for a new design racing car. The Type 101 was designed by Frank Dernie, Team Lotus most recent signing from Williams.
Piquet and Nakajima stayed on as the driver line-up. Satoru keeping his seat after matching Nelson's best time in 1988 Suzuka qualifying.

The first race of the new normally aspirated Formula saw the order much the same as before with the Mclarens out front and Ferrari playing catch-up.
Piquet retired in the Brazilian Grand Prix, but Nakajima raced conservatively to 8th place.
The result in San Marino was much the same with Piquet retiring and Nakajima finishing outside the points.

For the second consecutive year, Nakajima failed to qualify and Piquet retired in the Monaco Grand Prix.
The Mexican round gave Piquet his first finish of the season with 11th place, while Nakajima retired.
The US Grand Prix at Phoenix saw a double retirement for Team Lotus.
But Canada was much kinder to Piquet with a 4th place for the Brazilian, an event where Nakajima failed to qualify.

The French Grand Prix at Paul Ricard saw both Lotuses on the starting grid. Piquet managed to finish in 8th place while Nakajima retired.
Round 8 at Silverstone gave Piquet his second 4th place of the season. Nakajima also finished in 8th place.
The German Grand Prix gave Lotus 2 more points, courtesy of a 5th place for Piquet, with Nakajima retiring.
Piquet also finished in the points in the Hungarian Grand Prix with 6th place while Nakajima retired.

The next race in Belgium was a disaster for Team Lotus.
Conditions in qualifying were appalling and neither driver could get in a clear lap to qualify.
It was the first time fop many years that both Team Lotus cars had failed to qualify for a Grand prix.

Both drivers were on the starting grid for the Italian Grand Prix, though only Nakajima finished, in 10th place.

It was at this race that the 1990 Team Lotus line-up was revealed. The drivers were confirmed as Derek Warwick and Ulsterman Martin Donnelly (the first all British driver pairing since Clark and Hill).
There was also change on the engine front. Judd units were dropped in favour of powerful Lamborghini V12 engines.

The Portuguese Grand Prix in late September gave Nakajima a 7th place and another retirement for Piquet.
This was reversed in Spain with Piquet 8th and Nakajima retiring.
The penultimate race of the season in Japan gave Piquet his third 4th place of the season, though he had now signed for Benetton.

The final round of the Championship in Australia saw Nakajima give one of the best performances in the wet conditions.
Even though he span down to last at the first corner, he fought through to take 4th place, 3 points and fastest lap.

1989 saw another underperforming season for Team Lotus, with 6th place in the Constructors Championship and only 15 points. Piquet was 8th in the Drivers Championship and Nakajima a lowly 21st.