The host nation gathered gold medals in shooting, canoe, and cycling, while China predictably won another gold in table tennis.
In the pool, Phelps clocked 1 minute, 54.27 seconds, just ahead of American teammate Ryan Lochte, who touched in 1:54.90 to take the silver medal. Laszlo Cseh of Hungary finished in 1:56.22 to take bronze. Phelps plans to retire after his these Olympics, his fourth — but not before a few more swims. He qualified later Thursday night for the 100-metre butterfly final, winning his semifinal in 50.86.
Another American teammate, Rebecca Soni, set a second world record in as many days to defend her 200-metre breaststroke, touching in 2 minutes, 19.59 seconds. Ranomi Kromowidjojo of the Netherlands won the 100-metre freestyle, clocking 53.00 to improve on her own Olympic record set in Wednesday's semifinals.
Aliaksandra Herasimenia of Belarus touched in 53.38 to take the silver medal and Tang Yi of China finished in 53.44 to take bronze in swimming's signature event.
Track cycling saw a dramatic first day, with the women's team sprint world record falling three times in rapid succession. Home favourites Victoria Pendleton and Jessica Varnish of Britain clocked 32.526 seconds over the two laps of the Velodrome during qualifying to improve on the previous mark of 32.549 set by Germany in April.
But British cheers were quickly silenced by the Chinese pairing of Gong Jinjie and Guo Shuang, who went on to beat the record twice. And in a huge upset for the home fans, Pendleton and Varnish saw their medal hopes vanish when they were later relegated for making an early change in the first round.
More controversy erupted in the final when China won, but were then relegated to second place, giving gold to Germany, which had already seen defeat turn to victory against Britain. Gong and Guo had just finished a victory lap when the announcement came they had been relegated for an illegal relay in the final.
The news was better for the host nation in the men's team sprint event, with Philip Hindes, Jason Kenny and Chris Hoy breaking its own team world record to reach the final against France, then breaking it again in the final to take gold. The victory brought Hoy his fifth gold medal over three Olympics. France won the silver medal with a time of 43.013 seconds, while Germany beat Australia to claim the bronze.
Russian President Vladimir Putin, an avid judo player, was the latest dignitary to watch the games. He was rewarded by Russia's Tagir Khaibulaev winning the men's judo 100-kilogram gold, defeating defending Beijing champion Tuvshinbayar of Mongolia with a match-ending ippon throw that Putin and British Prime Minister David Cameron both stood to applaud.
Russia has already won two judo gold medals and a bronze this week, the country's first judo golds since the break-up of the Soviet Union.
Table tennis saw its second all-China final in two days, with Zhang Jike defeating Wang Hao 4-1 in the men's singles. Li Xiaoxia defeated teammate Ding Ning in Wednesday's women's final, which means the Asian power has claimed 22 of 26 gold medals since table tennis was introduced into the 1988 Olympics.
In tennis, Murray delighted a crowd that included Prince William and his wife, Kate, by winning his quarter-final at Wimbledon, beating Nicolas Almagro of Spain, 6-4, 6-1. Murray goes up against Novak Djokovic in the semifinal Friday, after the Serb defeated Jo-Wilfried Tsonga of France, 6-1, 7-5.
Serena Williams also reached the semifinals, beating former No. 1 Caroline Wozniacki of Denmark 6-0, 6-3. She'll face top-ranked Victoria Azarenka of Belarus Friday for a berth in the final and a chance at the first singles Olympic medal of her career.
Serena and her sister Venus, seeking their third gold medal in doubles, reached the semifinals by beating No. 2-seeded Sara Errani and Roberta Vinci of Italy, 6-1, 6-1.
No. 3 Maria Sharapova won a matchup of first-time Olympians, beating Kim Clijsters 6-2, 7-5. Sharapova's opponent Friday will be fellow Russian Maria Kirilenko, who defeated No. 6 Petra Kvitova of Germany 7-6 (3), 6-3.
Italy won a gold in women's fencing, with Elisa Di Francisca's 45-32 victory over defending champion Russia in the final of the women's foil team event.
South Korea won bronze with a 45-32 victory over France.
American gymnast Gabby Douglas, nicknamed "The Flying Squirrel," won the women's all-around title, becoming the third American to win gymnastics' biggest prize. It was her second gold medal of the London Games, two nights after she and her teammates gave the United States its first gymnastics Olympic title since 1996.
Separately, Olympic officials sought to draw a line under the badminton scandal, a day after eight players were disqualified from the women's doubles for trying to lose their matches and secure a more favourable draw in the next round. The International Olympic Committee urged the Chinese, South Korean and Indonesian teams to investigate the players' coaches.
Britain won gold medals in men's canoe double and in shooting. The host nation swept the two top spots in men's canoe slalom, with Tim Baillie and Etienne Stott winning gold, and David Florence and Richard Hounslow taking silver. Slovakian twins Pavel and Peter Hochschorner, who were attempting to win their fourth straight gold medal in the event, had to settle for bronze.
Another British gold came in shooting, with Peter Wilson winning the double trap. The 25-year-old shooter, who holds the world record, scored 188 points and won by two points ahead of Sweden's Hakan Dahlby, who claimed silver.
In kayak, France's Emilie Fer won the women's kayak slalom, ahead of Australia's Jessica Fox, who took silver, and Spain's Maialen Chourraut in third.