Michael Schumacher gave his title hopes a massive boost by winning the German Grand Prix as rival Fernando Alonso struggled to fifth in his Renault.
The Ferrari driver, who dominated once pole-sitter Kimi Raikkonen's McLaren made an early pit stop from the lead, cut his points deficit from 17 to 11.
Schumacher led home team-mate Felipe Massa, with Raikkonen third.
Jenson Button was a much-improved fourth for Honda ahead of the Renaults of Alonso and Giancarlo Fisichella.
Button had looked on course for third, but lost pace in the last part of the race and was unable to hold off Raikkonen.
The Englishman, who qualified fourth, was beaten off the line by both Renaults, but passed both on the second lap to return to his starting position.
He was a comfortable third for the first two-thirds of the race but his Honda dropped off the pace late on.
That put him under pressure first from Williams' Mark Webber - who drove a strong race and was running fourth when his car suffered a water leak with eight laps to go - and then Raikkonen.
Nevertheless, the race was a big step forward for Honda, who have struggled badly since the third race of the season.
Aerodynamic changes introduced on to the car before the last race appear to have made a significant improvement.
Raikkonen, on an unusual three-stop strategy, led off the line, but his hopes of challenging the Ferraris - never very realistic - were over as soon as the team had a problem fitting the right rear wheel at his first stop on lap 10.
The Finn dropped as low as seventh as his rivals did one less stop than him, but he grabbed fourth as he came out from his final stop, braving it out with Webber through the first two corners and muscling his way in front.
Raikkonen then quickly caught Button, passing him in the fast right-hander into the Stadium section with 10 laps to go.
"We had some problems yesterday in qualifying and we didn't have enough fuel and there was also a hydraulic problem in the car," Raikkonen said afterwards. "Looking at all those things, we are happy to finish third."
Raikkonen's early stop put Schumacher into a lead he was never to lose, and he was able to pace himself to his 89th career victory with Massa not far behind.
Renault struggled throughout the weekend and, although they denied it, the team appear to have been badly affected by the decision of the sport's governing body to ban a suspension system they pioneered last year.
The "mass damper", which had since been adopted by six other teams including Ferrari, enhanced cornering stability, and Renault struggled with grip all weekend.
But Ferrari's advantage was also almost certainly down to the advantage their Bridgestone tyres enjoyed over the rival Michelins.
Bridgestone - which is also used by Williams and Toyota - introduced a new family of tyres recently, and they appear to have a significant advantage over the Michelins used by Renault, Honda and McLaren.
"We had a superb weekend - our car functioned really great," said Schumacher afterwards.
"We worked very hard with Bridgestone to sort out our position and get organised until the last detail.
"We improved the car so it's a package which is the reason why we can perform as we do perform. Although I have to say it was a bit of a surprise being that much in front.
"We'll take it - it's the right moment in time why we need to have such a performance in order to climb down the gap in the championship and keep pressure on."
Alonso's hopes of stopping Schumacher overtaking him in the championship chase may rest on Michelin finding extra pace - and doing it soon.
In the meantime, the world champion was forced to put on a brave face after the race.
"As long as I do the maximum I'm always happy," said the Spaniard, who celebrated his 25th birthday on Saturday.
"I think the team did the maximum, Michelin did the maximum for us - we lost this battle but we're still ahead in the championship and we can do it I'm sure."
The pace of the Bridgestones was also demonstrated by Toyota's Jarno Trulli, who climbed impressively up to finish seventh after starting at the back.
Red Bull's Christian Klien took the final point in eighth place.
German Grand Prix result:
1. Michael Schumacher (Ger) Ferrari one hour 27 minutes 51.693 seconds
2. Felipe Massa (Brz) Ferrari +0.720 seconds
3. Kimi Raikkonen (Fin) McLaren - Mercedes +13.206
4. Jenson Button (GB) Honda +18.898
5. Fernando Alonso (Spa) Renault +23.707
6. Giancarlo Fisichella (Ita) Renault +24.814
7. Jarno Trulli (Ita) Toyota +26.544
8. Christian Klien (Aut) Red Bull - Ferrari +48.131
9. Ralf Schumacher (Ger) Toyota +60.351
10. Vitantonio Liuzzi (Ita) Toro Rosso - Cosworth 1 lap
11. David Coulthard (GB) Red Bull - Ferrari 1 lap
12. Scott Speed (US) Toro Rosso - Cosworth 1 lap
13. Christijan Albers (Ned) Midland - Toyota 1 lap
14. Tiago Monteiro (Por) Midland - Toyota 2 laps
Retired:
15. Mark Webber (Aus) Williams - Cosworth 59 laps completed
16 Takuma Sato (Jpn) Super Aguri - Honda 38 laps
17 Jacques Villeneuve (Can) BMW Sauber 30 laps
18 Rubens Barrichello (Brz) Honda 19 laps
19 Nick Heidfeld (Ger) BMW Sauber 9 laps
20 Pedro de la Rosa (Spa) McLaren - Mercedes 2 laps
21 Sakon Yamamoto (Jpn) Super Aguri - Honda 1 lap
22 Nico Rosberg (Ger) Williams - Cosworth no laps completed
Fastest Lap: Michael Schumacher, 1:16.357 on lap 17
