On the 41.5km course from Arc et Senans, the Briton outclassed the Tour peloton with a time of 51 minutes and 24 seconds to take a potentially decisive lead over the other favourites.
He leads second-placed defending champion Cadel Evans by 1:53 before Tuesday's rest day.
It was Wiggins' maiden Tour stage victory and came two days after he seized his first yellow jersey.
The near perfect day for Team Sky was crowned by a remarkable one-two as Chris Froome finished 35 seconds behind his compatriot.
Olympic champion and prologue winner Fabian Cancellara had to be content with the last podium spot, 57 seconds off the pace.
"I didn't set out to win the stage. I thought a guy like Fabian would probably win it. It was all about the general classification and take time on the likes of Cadel or (Vincenzo) Nibali. To win the stage as well is like Christmas," Wiggins told reporters.
"I've been saying since the start of the season that it was all about peaking for July. I was physically at my best out there. So yes, that was probably my best ever time trial."
Evans was the hardest hit by Team Sky's show of strength.
The Australian lost 1:43 on Wiggins and the 1:53 overall is a huge gap in terms of time and a heavy blow in terms of morale.
"It was what it is. It was not my best time trial. I'm not going to give up. But we've got to be realistic," he said.
Ironically, Wiggins was far less fatalistic and warned against any premature celebrations. Asked whether he had already won the Tour, he said: ""No, it's never over until the fat lady sings.
"It's just another day and there's a long way to go. It's a fantastic position to be in at this stage but I'm a human, not a machine and there's always the possibility of a bad day or a crash. Cadel is not going to give up before we get to Paris."
Third at the start of the day, Nibali - by no means a time trial specialist - limited the damage on the winding and bumpy roads to find himself 2:23 adrift overall.
But it was not good enough for the Italian to remain on the Tour podium as he was ousted from the top three by Froome.
Already the winner of the first mountain stage at La Planche des Belles Filles on Saturday, the Kenyan-born Froome again showed all-round qualities almost matching those of Wiggins.
To many, he now looks the only rider really on a par with Wiggins, a situation the two British team mates already faced in last year's Spanish Vuelta, when Froome finished second ahead of his leader on paper.
""We'll see where we go from here. I don't think we had a plan to have two riders in the first three at this stage," Wiggins said.
"It's more for bosses Dave (Brailsford) or Sean (Yates) to assess whether we need to sacrifice someone or if we finish with two on the podium."
The 178 riders left in the bunch will enjoy their first rest day on Tuesday before the peloton moves to the Alps.
