Alain Prost completed the purchase of the Ligier team in early 1997, and immediately changed the name to Prost. An exclusive contract for Peugeot engines was announced for 1998, but the team continued with Ligier's planned Mugen-Honda engines for 1997. As there was no time before the season started to design and build a new car, the team simply used the Ligier JS45 designed by Loïc Bigois and renamed it the Prost JS45. Podium finishes in Brazil (third) and Spain (second) for Olivier Panis promised much, but the Frenchman crashed heavily at high speed in Canada, breaking both his legs.

With its lead driver forced to miss much of the season, Prost struggled with novices Jarno Trulli and Shinji Nakano until Panis's return at the Luxembourg Grand Prix. There were glimpses, a commanding drive by Trulli in Austria where he led for much of the race before his engine expired, and a run by Trulli again to fourth at Germany showed potential, and a dogged points finish for Panis on his return in Luxembourg meant that Prost wasted no time in signing the pair up for a further season.

1997 world champion Jacques Villeneuve later remarked that in the year of his title victory, he had regarded Panis as something of a threat Panis had been fastest in Spain, and was running right behind Villeneuve in Argentina when his car gave up on him. He was close to winning in Canada too as his Bridgestone tyres were better equipped than the Goodyear tyred cars around him.