The Naval Academy was a 14-point underdog to the 8-3 Buckeyes, but the Midshipmen kept the game close and even led 20-17 midway through the third quarter. Art Schlichter, playing his final game as a Buckeye, closed his collegiate career with a pair of touchdown passes and the OSU offense did just enough to win.
Many expected the Buckeyes to cruise to an easy victory despite the disappointment of being sent to Memphis. Ohio State shared the Big Ten title, but Iowa was awarded the Rose Bowl nod because the Hawkeyes had not been to Pasadena since the 1958 season. A scheduling quirk also hurt the Buckeyes. Eight of the Big Ten's teams faced the other nine members in 1981. Only two did not – Ohio State and Iowa. That created a tie at the top of the conference standings at the end of the regular season.
The 1981 season could easily be viewed as a disappointment. Schlichter had returned for his senior season and had plenty of weapons at his disposal, but the defense did not hold up its end of the bargain. Ohio State's secondary was shredded in a non-conference loss to Florida State, and the defense also had bad performances in Big Ten losses at Wisconsin and Minnesota. The much-maligned defense did play well in a 14-9 win at Michigan, however, to end the regular season on a high note and earn a share of the conference crown.
The Midshipmen were a run-first offense, which was supposed to be exactly the time of attack the Buckeye defense could handle. The game even started perfectly for Ohio State. The Buckeyes built an early 10-0 lead thanks to a Bob Atha 35-yard field goal and a 50-yard touchdown pass from Schlichter to Gary Williams. But Navy rallied thanks in part to a gutsy call by head coach George Welsh. Facing a fourth down at its own 45-yard line, the Midshipmen went with a fake punt that worked for a 39-yard gain deep into OSU territory. Navy then capitalized on its new-found momentum with a 1-yard touchdown pass from quarterback Marco Pagnanelli to tight end Greg Papjohn. The Midshipmen later tied the game with a 41-yard field goal by Steve Fehr.
From that point on, the game was a hard-fought battle. Ohio State took the lead back on a 1-yard touchdown run by tailback Jimmy Gayle, a score set up by a Pagnanelli fumble. The Midshipmen responded with another Fehr field goal, and the Buckeyes led 17-13 at halftime.
Navy took the lead in the third quarter when the Midshipmen blocked an Atha punt and returned the loose ball 20 yards for a touchdown. Fehr's extra point kick was true, giving the Mids a 20-17 lead.
Fortunately for the Buckeyes, Navy could not stop Ohio State's offense. Gayle gave OSU the lead back with a 2-yard touchdown plunge, and Schlichter threw his 50th career touchdown pass to Cedric Anderson to extend the lead to 31-20 with 5:22 left in the fourth quarter.
The Midshipmen did not quit though. Navy drove 97 yards for the final score of the game, a 1-yard touchdown pass from Pagnanelli to Papajohn with only eight seconds remaining.
Navy's Eddie Myers was voted the game's most valuable player. He finished with 117 yards rushing, most against the Buckeyes in the '81 season. Schlichter had a solid game in his OSU finale. He threw for 159 yards and two touchdowns with an interception. Tim Spencer led Ohio State's rushing attack with 96 yards on 22 carries, while Gayle finished with 88 yards.
The loss by the Midshipmen represented Welsh's final game at Navy. He announced his intention to leave for Virginia prior to the bowl game. Ohio State head coach Earle Bruce replaced three assistants following the season, including a secondary coach by the name of Nick Saban.