The former Olympic road race champion took advantage of a lull in the cagey action on the first category summit finish to attack with four kilometres to go.
He would stay away, beating Matteo Jorgensen and Mauro Schmid, who rounded off the podium 45 seconds back from the Ecuadorian, who made it nine stage wins across the three Grand Tours.
Valentin Paret-Peintre finished fourth and closed the gap to just one point in the King of the Mountains competition to race leader Pogacar, with Carapaz lurking six points further back after his stage win.
There were no gaps in the GC group, with Pogacar keeping his advantage of four minutes and 32 seconds over Remco Evenepoel. Isaac del Toro remains third, whilst Paul Seixas is 20 seconds further back from the Mexican rider, in what could be an intriguing fight for the young rider's white jersey.
One issue for Pogacar was the abandonment of domestique Brandon McNulty, who was suffering from illness.
Breaking away
It was a day for the breakaway from the beginning, with Pogacar's UAE Team Emirates-XRG unwilling to control the day, but it still took more than 50 kilometres for the decisive move to go.
Seven riders went clear, initiated by Uno-X Mobility's Tobias Halland Johannessen, and he took seven clear. Paret-Peintre and Carapaz were in a stage-long battle for points in the polka dot jersey, whilst Schmid, Jorgensen and Raul Garcia Pierna were all looking for stage honours.
Groups were chasing them down, and got to within 40 seconds of the seven up front, but were never able to make the catch, allowing them to battle it out on the slopes of Orcieres-Merlette.
The American, Jorgensen, tried to go clear with some attacks, but it was Carapaz who put in the decisive dig to win the stage.
Pedersen extends lead in green
After seeing his advantage in the green jersey competition slashed on Wednesday by Jasper Philipsen to seven points, Mads Pedersen was desperate to get into the day's break.
Despite the profile not suiting the hulking Dane, he rode with strength across the mountainous terrain, assisted by Lidl-Trek teammate Mathias Vacek, to mop up the intermediate sprint points in the closing stages, putting 25 points into the Belgian.
He may try the same trick tomorrow on the way to Alpe D'Huez, which, if he is successful, will mean he is almost guaranteed the green jersey when the race gets to Paris on Sunday.
Tomorrow's stage in the Alps now looms large, with a 172.9km run from Gap to the mythical 21 bends of Alpe D'Huez, where Tour organisers ASO have already closed the roads due to the influx of fans on the climb.
Josh Donaldson is a Global Senior Editor and International Football Specialist for Flashscore. From the UK, now living in Prague, Josh specialises in football and cycling and can be found at an obscure ground watching games or on his bike. You can follow Josh on X and read his articles here.
