Rossi, who opted for the extra-hard Bridgestone rear tyre in contrast to reigning champion Marquez, slashed a four-second deficit to the Repsol Honda rider in the final third of the race, who opted for the hard compound rear in a tactical ploy aimed at enabling him to build an advantage in the first third of the race.
The double premier class champion streaked into a comfortable lead but it was inevitable that Marquez’s tyre choice would eventually cost him time in the closing stages and the question was whether or not Rossi would have sufficient time remaining to capitalise fully from the extra durability of the extra-hard tyre.
It quickly became clear that Yamaha’s strategy had paid off though as Rossi relentlessly reeled in Marquez to sit on his rear wheel with three laps remaining at the Termas de Rio Hondo circuit.
The Italian rider appeared content to weigh up his options before making a pass at Turn 2 to briefly take the lead, with Marquez immediately fighting back.
Undeterred, Rossi went underneath Marquez on the brakes into Turn 5 and they touched on the inside before a second contact on the exit of the corner, with Marquez’s front tyre colliding with the rear wheel of Rossi’s M1, launched the 22-year-old from his Honda and his race was over.
Rossi went on to close out his second victory of the season from Ducati’s Andrea Dovizioso, while Britain’s Cal Crutchlow returned to the MotoGP rostrum on the LCR Honda after a superb late move at the final corner to snatch third from Andrea Iannone.
Jorge Lorenzo on the second of the Movistar Yamaha machines and Monster Yamaha Tech 3’s Bradley Smith were the top six.
Suzuki’s Aleix Espargaro, who started from second place on the front row, finished ahead of his brother Pol (Monster Yamaha Tech 3) as they took seventh and eighth respectively.
Aussie Jack Miller gave CMW LCR Honda more cause for celebration as he ended the race as the top Open class rider on the RC213V-RS in 12th place.
Espargaro snatched the lead on the Suzuki from the off into the first corner but Marquez scythed past and the pair traded blows in the opening turns before the Honda rider made his pass stick.
Marquez set a blistering pace using the hard option tyre and was already 0.8 seconds ahead after the first lap, with Lorenzo trying to hang on in second place ahead of Espargaro, Crutchlow, Dovizioso and Iannone, with Rossi back in eighth place after starting from the same position on row three.
As the leading group jostled for position, Marquez was easing away at the front, increasing his advantage with each lap that passed to hold a lead of 2.9 seconds by lap six, with Crutchlow in second place on the LCR Honda ahead of Iannone and Lorenzo, who was now in team-mate Rossi’s sights.
Dovizioso moved into second place on the GP15 but the man on the move was Rossi, who had worked his way into fourth place by lap nine after passing Lorenzo.
A mistake by Crutchlow, who ran wide at Turn 7, was pounced on by Rossi as he slotted into third and hunted down Dovizioso, passing the Italian at Turn 7 on the following lap.
The chase was now on with Marquez 4.3 seconds ahead, but Rossi initially failed to make any significant inroads into the Honda rider’s cushion until lap 15, when clawed back 0.3 seconds.
Rossi stuck to the task and the gap tumble bit by bit before the Yamaha rider took chunks out of Marquez’s lead with six laps remaining.
Dovizioso appeared to be holding a safe third at this stage ahead of Iannone and Crutchlow but all eyes were on Rossi as the distance to Marquez had visibly shrunk.
On lap 21, Rossi set a new lap record in 1m 39.019s as he rapidly hauled in the factory Honda and the nine-time world champion was poised to strike on the penultimate lap, making an unsuccessful attempt at Turn 2 to wrestle the lead from Marquez before drama unfolded seconds later at Turn 5, when Marquez blew his chance of vital championship points after touching the rear of Rossi’s M1.
Dovizioso bagged a solid runner-up finish as Iannone and Crutchlow disputed third, with the British rider pulling off a last-corner move to make sure of the last place on the rostrum.
Rossi now leads Dovizioso by six points in the standings, with Marquez dropping to fifth, 30 points behind The Doctor after three rounds.
Scott Redding crossed the line in ninth on the EG 0,0 Marc VDS Honda ahead of Maverick Vinales on the second Suzuki, with Danilo Petrucci 11th (Pramac Ducati) ahead of Miller.
Stefan Bradl secured the final championship point in 15th ahead of Aspar Honda pair Nicky Hayden and Eugene Laverty.
Yonny Hernandez’s race ended on lap seven after his Pramac Ducati caught fire and he was forced to abandon the smoking machine.
To compound a miserable weekend for the Repsol Honda team, Hiroshi Aoyama was knocked off his machine at the final turn while holding 11th place by Danilo Petrucci.
Race Direction reviewed the incident and immediately docked a penalty point from the Pramac Ducati rider.