Rodriguez went into the final five legs of the 21-stage race with a healthy 28-second lead after outpacing his fellow Spaniard in Monday's gruelling mountain climb. But his prospects of winning a first major race are now in jeopardy as he struggled to attack the Collado La Hoz, a second category climb towards the finish line at Fuente De.
Pushed into third place by Alejandro Valverde, who with Contador outsprinted chase leader Sergio Henoa to the line, Rodriguez now sits two minutes and 28 seconds off the lead with four stages remaining.
Contador established his daunting one minute and 52 second lead over Valverde before getting out of his saddle to pass Henoa and solo over the line to claim the red jersey.
The 187km route began in Santander with Gabriel Rasch mounting an early attack. Rodriguez was soon caught out as the peloton split at halfway, just about managing to regain his place in the leading pack with Contador steadily extending his lead on the Collado La Hoz.
But Rodriguez floundered without the help of his team-mates and was totally left behind as Contador turned the Vuelta standings upside down with a searing sprint to the finish line.
Britain's Chris Froome held on to fourth place overall, five minutes off the pace.