The Spaniard, who outshone Olympic champion Fabian Cancellara by three seconds, now leads his nearest rival for final victory, Luxembourg's Andy Schleck, by four minutes and 11 seconds, a comfortable gap three days before the finish in Paris.
Contador won in 48 minutes and 30 seconds, taking his second stage in this Tour after the mountain ride to Verbier in Switzerland last Sunday.
Lance Armstrong made it back on the overall podium, 5:25 behind his Astana team mate, ousting Andy Schleck's brother Frank from third place.
Yet the seven times champion was relatively disappointing in what used to be his favourite discipline, finishing 16th, 1:30 behind Contador.
Contador's performance was all the more impressive as most of the Tour favourites, who started after Cancellara and third-placed Russian Mikhail Ignatiev, faced a headwind in the finale.
The 2007 Tour champion, who also holds the Spanish time-trial title, confirmed he was not only the best climber in the peloton, but the best all-rounder in the race.
Andy Schleck conceded it would be almost impossible to topple Contador, even though the Luxembourg champion, a pure climber, limited the damage to finish 21st, 1:45 off the pace.
Although the Tour title appears out of reach, podium places will be at stake in Saturday's exciting Ventoux stage.
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