The Astana team leader nicknamed "The Shark" for his road savvy took the final lead in a cycling dance of sorts with other title hopefuls, who took turns in front in the last stretch through a sea of fans from York to Sheffield.
Nibali perhaps had more at stake: The 29-year-old rider has won the Italian Giro and Spain's Vuelta, but has never captured cycling's showcase event.
The victory on Sunday gave him both his first Tour stage win and yellow jersey, and sent a message that he could contend to take it home from Paris in three weeks.
With about a mile left, Nibali escaped a 21-man breakaway bunch at the end of the 125-mile course over nine heath-covered hills of Yorkshire, and held off their late surge. England is hosting the first three Tour stages this year.
GERMAN STRIPPED OF YELLOW JERSEY
Marcel Kittel, a powerful German sprinter who often struggles on climbs, trailed nearly 20 minutes back and lost the yellow jersey that he had captured by winning Stage 1.
While the Italian won the battle to the line, under the shadow of a black Sheffield Forgemasters tower, defending champion Chris Froome of Britain and two-time winner Alberto Contador of Spain are focusing more on the overall race — which ends July 27 on Paris' Champs-Elysees.
Overall, Nibali leads 20 other riders by two seconds, including Froome in fifth place and Contador in eighth.
A six-man breakaway bunch tried its chances early, but got swallowed up by the pack with some 20 miles left. Then, the big race stars moved to the front, splitting the pack.
Contador, Froome, and Americans Andrew Talansky and Tejay van Garderen all spent time at the front. At times, they mustered bursts of speed or zipped across with width of the road in tactical manoeuvrs.
"In the finale, a lot of contenders were making moves: Nibali ended up taking two seconds on us," Froome said. "It's not a big margin. For me, it was about staying out of trouble to stay at the front, and avoiding any major issues or splits.
"I'm tired, but I hope everyone's tired after a day like today."
TIME TO WORK, ASTANA
Dave Brailsford, boss of Froome's Team Sky, said the leaders actually "were all hesitant, because nobody wanted the jersey." In the cycling playbook, the yellow shirt brings both glory and responsibility. Brailsford said: "Astana will have to now defend it, which is pretty good for anybody else.
"Perfect. They've got to work."
Nibali didn't dare claim he might keep it all the way to Paris, saying "the Tour de France doesn't stop here: We have three weeks to go, and very tough and tricky stages lie ahead."
Monday's stage should be a far less grueling ride: Riders cover 96 miles from university town Cambridge to London, where the pack will finish on the Mall not far from Big Ben and Westminster Abbey.
CROWDS FOR A 'CLASSIC' STAGE
The course Sunday resembled that of historic one-day races known as "classics," which often feature hilly terrain.
Michael Rodgers, an Australian on Contador's Tinkoff-Saxo Bank team, called it "a bit of a special stage, like the Amstel Gold Race, but with 20 times the people."
New roads for cycling's greatest race also mean new audiences, some of whom are so enthusiastic and eager for a selfie with the pack that they might not realize the hazards of getting too close to the riders as they go by.
Untold thousands turned out just hours after one of the biggest British stars in the race, Mark Cavendish, dropped out because of pain from a separated right shoulder sustained in a crash Saturday.
"There are thousands and thousands of people. It's great but it's also dangerous," Contador said.
Race officials say millions of fans have flooded the course route in just the first two stages.
While Yorkshire doesn't have ascents on a par with the Alps or Pyrenees in France, riders faced nine low- to mid-grade climbs. The hardest was the Holme Moss pass. The steepest was also the shortest: The half-mile Jenkin Road pass had an average gradient of 10.8 per cent, just 3 miles from the finish line.
Several riders crashed. Simon Gerrans, who went down with Cavendish in Saturday's stage, also spilled — as did van Garderen and Joachim Rodriguez, the third-place finisher in the 2013 Tour. All recovered to finish the stage.
On the up-and-down, picturesque course, the 197-rider peloton scaled a narrow, cobblestone hill in Haworth, where the Bronte sisters — the famed 19th-century novelists — lived when their father was parson in the town.