The 1921 Isle of Man Tourist Trophy Junior 350 cc race took place on Tuesday 14 June and the Senior 500 cc was on Thursday 16 June.
In this year AJS redeemed themselves by completing a hat trick, taking the first four places for a total of six of the top ten places in the Junior 350 cc race. Works teams boosted the entries to 133 riders and machines and amongst the thousands of spectators was Stanley Woods, making his first visit to the island as a young man, who would later return to make TT history by winning 10 times.
The Junior race speeds also rose considerably over the previous year with a lap speed of more than 50 mph (80 km/h). It had been suggested that sidecar racing could start in 1921 but this idea was not well received and not implemented until 1923. It was announced there was a possibility of moving the TT races to Belgium for 1922 but the Auto-Cycle Union never made the switch.
Despite AJS motorcycles filling the first five places of the Junior race, it was punctures that decided the race outcome. The eventual winner of the 1921 Junior TT Race was Eric Williams riding an AJS in 3 hours, 37 minutes and 23 seconds, an average race speed of 52.10 mph (83.85 km/h). The race was initially led by Howard R Davies also riding for AJS who set a new lap record for the Junior race of 41 minutes and 4 seconds, an average speed of 55.15 mph (88.76 km/h). Time lost by Howard Davies mending a puncture at Windy Corner gave the lead to Jim Whalley riding a Massey-Arran motorcycle. On the last lap Whalley also punctured at Windy Corner and finished the Junior race in fifth place. New Imperial made sales-boosting news with a win in the Lightweight 250 cc class by rider Doug Prentice, coming tenth overall in the 350 cc Junior race.
More drama was to follow in the Senior event as the race-lead changed every lap between Alec Bennett riding a Sunbeam, Freddie W.Dixon riding an Indian, and Freddie Edmond riding a Triumph who set a new lap record of 40 minutes and 8 seconds, an average speed of 56.40 mph (90.77 km/h). The Senior race was eventually won by Howard Davies riding a 350 cc Junior race motorcycle, by a margin of 2 minutes and 3 seconds from Freddie Dixon and Bert Le Vack in 4 hours, 9 minutes and 22 seconds, at an average race speed of 54.49 mph (87.69 km/h).