The Quick-Step Floors puncheur was at fourth wheel behind a frisky Dan Martin (UAE) who attacked with 500 metres to go on the final climb.
In the final 200 metres, the Frenchman passed Romain Bardet (Ag2R) on the inside around the final right-hand bend and then put on a burst of speed to move past Geraint Thomas (Sky) and finally Martin.
“I’m super happy," the impressively goateed Alaphilippe said. "The Dauphiné is a very competitive race. It’s never easy to win here. I wasn’t far behind [Daryl] Impey on stage 1.
"Today, it was the only stage win I could target really. Yesterday in the hotel room, I told Bob [Jungels] that I seriously wanted to go for it. I rode flat out in the last five kilometres.
"It was burning in my legs. At the end, I gave everything. Now I’ll try to help Bob until Sunday evening because I know it’ll be more complicated for me. I’m a punchy rider but not a pure climber.”
The result was heartbreaking for Dario Cataldo (Astana) who'd been in the break for over 90km - the final 40 on his own - only to be swallowed up by Martin's late attack.
Earlier, at around the 77km mark, Cataldo pulled clear of the bunch with Lukas Pöstlberger (BORA-hansgrohe), Edvald Boasson Hagen (Dimension Data), and Jens Keukeleire (Mitchelton-Scott). Around five kilometres later they were joined by Aussie Simon Clarke (EF Cannondale Drapac), Bryan Coquard (Vital Concept) Odd Christian Eiking (Wanty-Groupe Gobert) and Arnaud Courteille (Vital Concept).
Cataldo left his fellow escapees behind on the penultimate climb but his lead was contained by Sky to around two minutes into the final ascent, keeping him from the virtual race lead. Ag2R's efforts at the front then moved their leader and the main bunch ever closer to the Italian.
The race continues with the 130km fifth stage, which will likely see a stoush between the major GC contenders on the 12.7km hors categorie finish in Valmorel.
Watch it LIVE streamed here and broadcast on SBS Viceland from 11:20pm AEST.