In the Tour’s first big shake-up, the Sky squad was dominant up the first summit finish to allow Christopher Froome to win the seventh stage from Tomblaine to La Planche des Belles Filles ski station.
The 198-kilometer trek into the Vosges range went a long way toward shaping the three-week race as experts predicted before the start – a showdown between Wiggins and defending champion Cadel Evans.
In a five-rider breakaway group on the final climb, Evans tried an attack just before the super-steep climb in the last kilometer, but Froome beat him by two seconds as Wiggins stayed close to the Australian’s back wheel.
After the finish, compatriots Wiggins and Froome hugged, with Wiggins becoming the first Briton since David Millar in 2000 to wear the yellow jersey.
Cancellara, the Swiss time-trial specialist who had worn the jersey since winning the prologue a week ago, is 1 minute, 52 seconds behind Froome – but more importantly 1:50 back of Wiggins.
The Sky leader, who began the day seven seconds behind Cancellara in second place overall, leads Evans by 10 seconds.
Vincenzo Nibali, of Italy, was fourth to climb to third overall, 16 seconds behind.
“It’s a great day for the team, we won the stage and took the yellow jersey,” Wiggins said.
“This is my first time in the yellow jersey. It’s incredible – it’s been a dream of mine since I was a kid.”
Only five riders are within a minute of his Wiggins’ time.
Wiggins, a three-time Olympic track gold medalist, became the pre-race favorite after winning the Paris-Nice, Tour de Romandie and Criterium du Dauphine stage races this year.