His U.S. Postal Service squad dominated the rain-soaked event, giving the Texan the yellow jersey with a 36-second lead over fellow American and former teammate Tyler Hamilton.
"It really was a special day for the team," Armstrong said. "The team was incredible. The rhythm was perfect. It's incredible.
Armstrong, bidding for a record sixth straight Tour title, smiled broadly as he crossed the line, riding a special aerodynamic bike and wearing an aerodynamic helmet and suit.
Jan Ullrich (search), a five-time Tour runner-up and second again to Armstrong last year, finished fourth and is 55 seconds off the champion's overall time.
Other challengers were also left trailing: Ivan Basso is 1 minute, 17 seconds behind Armstrong overall, and Roberto Heras is 1 minute, 45 seconds back.
Armstrong said his team started slowly but picked up speed.
"That's the sign of a great team," he said. "We fought hard."
The blue-clad Postal squad celebrated with hugs at the finish line. Armstrong raised his arms as he accepted the yellow jersey that in the past five years he has come to call his own.
Ullrich, the 1997 Tour winner, entered the race as Armstrong's most feared rival. His T-Mobile squad was more than a minute behind, but new rules designed to limit the advantage that top teams gain in the event protected Ullrich to some extent. In all, the German lost 40 seconds to Armstrong's team — still a severe setback.
Despite rain that soaked the 40-mile course from Cambrai to Arras, Armstrong's team still averaged more than 32 mph — the third fastest time in the history of the event.
Armstrong will still be looking to the later mountain stages and individual time trials to put away his rivals for good. But the advantage gained in the team event was a major step toward yet another title.
Armstrong and four other teammates occupy the top places in the overall standings — a clear sign of the strength.
The Postal squad had the advantage of starting last of the 21 teams. It also benefited from a stop in the rain that had doused the course, turning the roads slick and causing several teams problems. There were several crashes.
The Postal team has worked right from the start of the Tour, beginning with an opening time trial Saturday, to position itself as the squad to start last. That enabled the team to see how others fared on the route and judge the pace.
"It's details that can win the Tour de France," said Dirk Demol, an assistant sports manager for the team.
Armstrong has said he was not aiming to keep the yellow jersey in the flat stages that come in the days following the time trial. Those stages favor strong sprinters.
His aim is to be wearing it on the day that counts — at the finish in Paris on July 25.
"I suspect we'll be willing to give the jersey to someone else," he said.