Last year's Commonwealth Games gold medallist in the road race outsprinted Italian ace Valentina Scandolara and Australian Matilda Raynolds at Ritchie Boulevard in Geelong.
Those three riders broke away early in the 45-minute criterium and finished 17 seconds clear of the main bunch.
Hosking and Scandolara, who are former series winners, and reigning Australian criterium champion Rebecca Wiasak are all on 17 points ahead of the third and final race on Thursday at suburban Williamstown.
Race one winner Amanda Spratt finished seventh on Wednesday and is one point off the series lead, while Wiasak led home the main group in fourth place.
She and Hosking are teammates in the Lexus Blackburn All-Stars for the series and Spratt will most likely work for her sprinter teammate at Williamstown.
The Lexus Blackburn Bay Crits continue Thursday 3 January with live coverage on the Cycling Central Facebook page from 1pm AEDT.
Hosking's win was not unexpected, given Ritchie Boulevard suits her strengths.
But she is starting the season with much less form than a year ago when Hosking had a breakthrough win at the Cadel Evans Great Ocean Road race and then led an outstanding Australian team ride at the Commonwealth Games.
"It's always nice to come back and Geelong agrees with me," said Hosking, the 2015 Bay Crits champion.
"I'm feeling pretty sick right now ... obviously, it (winning) is a great sign.
"I spoke a lot with my coach in this off-season about trying to pick up results in smaller races, to give you the confidence for the bigger races.
"But I still know there's a lot of work to go and I'm fortunate that this course is really suited to my strengths - it's easier to hide my weaknesses."
After the Bay Crits and the weekend's road nationals, Hosking will ride with her Italian-based Ale Cipollini team at the Santos Women's Tour in Adelaide.
"There's a little bit of pressure there because I feel a bit indebted to them," Hosking said of her team sending out a team to Australia.
"You do feel like you owe them something, but they also want me to win in Europe."