Europcar's Thomas Voeckler took the stage win into Bagneres de Luchon after a brutal day in the Pyrenees, finishing 1 minute 40 seconds ahead of his nearest rival and claiming the lead in the mountains classification.
His storming victory was his second in this year's Tour and France's fifth with Thibaut Pinot, Pierre Rolland and Pierrick Fedrigo all having taken stage wins.
The hopes of the defending champion, BMC's Cadel Evans, meanwhile, were extinguished on a difficult day; he tumbled down the general classification standings to seventh.
Wiggins retains his lead in the general classification, 2min 05sec ahead of his Sky team-mate Chris Froome, with Vincenzo Nibali (Liquigas-Cannondale) 2min 23sec behind in third and Jurgen van den Broeck (Lotto-Belisol) fourth at 5min 46sec.
The day's racing got off to an aggressive start with a 38-strong breakaway group, including Voeckler, Dan Martin (Garmin-Sharp), Fredrik Kessiakoff (Astana) and Brice Feillu (Saur-Sojasun), escaping in the opening kilometres.
Kessiakoff, who began the day in the King of the Mountains polka dot jersey, was beaten to the summit of the hors categorie Col d'Aubisque by Voeckler, who took the maximum 25 points in the mountains classification.
The relentless onslaught continued as the lead group ascended the Col du Tourmalet as Martin, Feillu, Voeckler and Kessiakoff steadily pulled away from their fellow escapees.
Kessiakoff struggled to maintain the high tempo and was dropped, enabling Voeckler to again claim the full 25 points at the summit.
Voeckler, now famous for his Tour de France heroics, saw his trademark grimace came to the fore, pulling faces that would put a world champion gurner to shame, as he and Feillu built a lead of more than 10 minutes.
The peloton splintered into several groups in the formidable hors categorie climbs and Wiggins arrived at the summit of Col du Tourmalet in a 30-strong main bunch containing his fellow GC contenders Evans, Nibali and Van den Broeck. As the gruelling Pyrenees toil continued, Nibali and his team-mate Ivan Basso cranked up the pressure on Col d'Aspin, and, while Wiggins weathered the storm, Evans was spat out the back of the group and trailed his rivals by almost a minute as they approached the day's final climb at Col de Peyresourde. Evans was paced back by his team to rejoin the main group with 26km to go.
Van de Broeck's Lotto-Belisol team then had a go at the front, trying to eat into Wiggins' lead, but the Sky leader remained relaxed, flanked by Froome, Michael Rogers and Richie Porte.
The expected attack from Nibali came on the Col de Peyresourde, Froome and Wiggins giving chase across the gap to catch the Italian, leaving Evans behind. Nibali attacked again close to the summit, but Wiggins dug deep to once again regain contact. In the end the trio crossed the line together, Wiggins claiming the maillot jaune for a 10th day.
He said. "I think we passed the test again; the team were fantastic. Ideal scenario:putting even more time into Cadel. Obviously we didn't get rid of Nibali; he was strong out there today. He [Nibali] is a class bike rider so you never underestimate him. It's nice to be able to finish with him and take everything he threw at us.
"Tomorrow is another day and another challenge. I guess everyone starts thinking about the time trial next, which is a mountain stage in itself. But [it's] another day ticked off."
Voeckler, meanwhile, pulled away to take his stage win old school-style with no race radio, power meter, heart rate monitor, not even a bike computer to show speed or distance. He said. "I have been racing in these climbs since I was 19 years old; I know every metre. There was 191km of racing, and I know all 191km by heart. I did four Cols on the front. That is the sort of thing I watched [others do] on television as a kid but today it was me who did it."
Today's stage 17 will be another tough day in the Pyrenees and among the final opportunities for Wiggins' rivals to attack and gain time.
Details: Stage 16 (197km, Pau to Bagneres-de-Luchon) 1 T Voeckler (Fra) Europcar, 5hr 35min 02sec behind, 2 C Sorensen (Den) Saxo Bank 1.40, 3 G Izagirre (Spa) Euskaltel 3.22, 4 A Vinokurov (Kaz) Astana, 5 B Feillu (Fra) Saur-Sojasun 3.58, 6 J Voigt (Ger) RadioShack 4.18, 7 D Martin (Irl) Garmin 6.08, 8 S Stortoni (Ita) Lampre, 9 G Caruso (Ita) Katusha, 10 L ten Dam (Ned) Rabobank 6.11, 11 V Nibali (Ita) Liquigas 7.09, 12 B Wiggins (Eng) Team Sky, 13 C Froome (Eng) Team Sky, 14 N Roche (Irl) AG2R 8.07, 15 T Van Garderen (US) BMC Racing, 16 J Van den Broeck (Bel) Lotto, 17 H Zubeldia (Spa) RadioShack, 18 A Valverde (Spa) Movistar, 19 J J Cobo (Spa) Movistar, 20 C Horner (US) RadioShack, 21 J Brajkovic (Svn) Astana 8.48, 22 P Rolland (Fra) Europcar, 23 T Pinot (Fra) FDJ 10.01, 24 E Martinez (Spa) Euskaltel 10.46, 25 J Vanendert (Bel) Lotto, 26 C Kern (Fra) Europcar, 27 M Monfort (Bel) RadioShack 10.54, 28 D Menchov (Rus) Katusha, 29 E Vorganov (Rus) Katusha, 30 Rui Costa (Por) Movistar, 56 S Cummings (Eng) BMC Racing 20.25, 133 D Millar (Sco) Garmin 33.04, 134 M Cavendish (IoM) Team Sky same time
General Classification 1 Wiggins 74hr 15min 32sec , 2 Froome 2.05, 3 Nibali 2.23, 4 Van den Broeck 5.46, 5 Zubeldia 7.13, 6 Van Garderen 7.55, 7 C Evans (Aus) BMC Racing 8.06, 8 Brajkovic 9.09, 9 Rolland 10.10, 10 Pinot 11.43, 11 Roche 11.47, 12 A Kloeden (Ger) RadioShack 13.14, 13 Horner 13.39, 14 Sorensen 14.43, 15 Menchov 21.06, 16 Monfort 21.26, 17 Martinez 21.41, 18 Rui Costa 22.47, 19 E Vorganov (Rus) Katusha 24.20, 20 Valverde 33.57, 21, 23 Voeckler 37.19, 85 Cummings 2.00.13, 93 Millar 2.09.05, 144 Cavendish 2.50.38
Points 1 P Sagan (Svk) Liquigas 356pts, 2 A Greipel (Ger) Lotto 254, 3 M Goss (Aus) Orica 203, 4 M Cavendish (IoM) Team Sky 130, 5 E Boasson Hagen (Nor) Team Sky 127
Mountains 1 Voeckler 107pts, 2 F Kessiakoff (Swe) Astana 103, 3 Sorensen 77, 4 Rolland 55 5 B Feillu (Fra) Saur-Sojasun 38
Teams 1 RadioShack (Lux) 222hr 58min 15sec, 2 Team Sky (GB) 17:18, 3 Astana (Kaz) 28:53, 4 BMC Racing (US) 29:13
Youths 1 Van Garderen 74hr 23min 27sec, 2 Pinot 3.48, 3 S Kruijswijk (Ned) Rabobank 45:26, 4 G Izagirre (Spa) Euskaltel 52:49, 5 Sagan 54:43