Four teams entered the competition. Two OFC members competed: Australia and New Zealand. They were joined by two non-OFC members, Israel and Chinese Taipei. Israel competed in the OFC tournament as they had been excluded from AFC competition since 1974, and Chinese Taipei's were unable to compete in the AFC competition due to political conflict with China.
The competition had a group format, with each team playing each of the others twice between September and November 1985. The winner of the tournament was Australia, who qualified for the UEFA-OFC play-off against Scotland for a finals position. Australia lost, meaning that there were no OFC teams at the finals in Mexico.
The winning team of the OFC qualification tournament played the UEFA Group 7 runners-up in a home-and-away play-off. The winner of this play-off qualified for the 1986 FIFA World Cup.