The Dutchman set a time of 50-37 to beat Britain's Geraint Thomas by 49 seconds but more importantly, gained 2-53 on race leader Nairo Quintana (Movistar) to move into the overall lead of the race by 2-23 over the Colombian.
Time trial specialist Dumoulin pulled out a storming performance on Blockhaus to finish only 24 seconds behind Quintana on the summit finish on Sunday, but showed his prowess on stage 10 as he led through every time check on the course to take a commanding victory.
Geraint Thomas, after crashing in an incident with a motorbike on Sunday, didn't show any signs of wavering determination and set an impressive benchmark before Dumoulin finished. The Welshman has improved his position on GC, moving to 11th place and within 14 seconds of the top-10 after sitting in 17th before the stage, but still sits 5-33 off the lead.
His team-mate Vasil Kiryienka (Team Sky) set the early benchmark of 52-37 early on in the day, despite crashing in the final corner. And crashes were a frequent occurrence on the 39.8km course, with Pavel Brutt (Gazprom-RusVelo) and Fernando Gaviria (Quick-Step) among a plethora of riders taking spills during their efforts.
Luis Leon Sanchez (Astana) was then the next rider to set the new fastest time with 52-17, before Thomas followed and took around 50 seconds off the Spaniard's time.
Adam Yates (Orica-Scott) looked to be pulling out a great performance as he went quickly through the first intermediate check point, but seemed to fade as he got further on and finished with a time of 53-15.
Other GC contenders will be pleased with their performance in the difficult time trial. Vincenzo Nibali (Bahrai-Merida) limited his losses with 2-07 dropped to Dumoulin, while Bob Jungels (Quick-Step) will be happy to improve his overall time with a ride to third place, 56 seconds down on the winner.
The likes of Thibaut Pinot (FDJ) and Steven Kruijswijk (LottoNL-Jumbo) will rue a missed opportunity to make up some time. Kruijswijk, a reasonable time trial rider, lost 2-43 on the stage having already suffered on the stage nine summit finish to Blockhaus, while French champion Pinot looked out of sorts as he lost 2-42 and slipped out of the top three overall.
It'll now be up to Quintana to try and attack in the coming mountain stages to try and regain the lost time on Dumoulin before the second time trial of the Giro on the final day.
Stage 11 will see the riders take on three classified climbs in a tough 161km stage that could suit a breakaway.
Giro d'Italia 2017 stage 10, Foligno - Montefalco (39.8km, ITT)
1. Tom Dumoulin (Ned) Sunweb, in 50-37 (average speed 47.178kmh)
2. Geraint Thomas (GBr) Team Sky, at 49 secs
3. Bob Jungels (Lux) Quick Step Floors, at 56 secs
4. Luis Leon Sanchez (Spa) Astana, at 1-40
5. Vasil Kiryenka (Blr) Team Sky, at 2-00
6. Vincenzo Nibali (Ita) Bahrain-Merida, at 2-07
7. Maxime Monfort (Bel) Lotto-Soudal, 2-13
8. Jan Tratnik (Slo) CCC Sprandi Polkowice, at 2-13
9. Jos Van Emden (Ned) LottoNL-Jumbo, at 2-15
10. Andrey Amador (CRC) Movistar, at 2-16
Overall classification after stage 10
1. Tom Dumoulin (Ned) Sunweb, in 42-57-16
2. Nairo Quintana (Col) Movistar, at 2-23
3. Bauke Mollema (Ned) Trek-Segafredo, at 2-38
4. Thibaut Pinot (Fra) FDJ, at 2-40
5. Vincenzo Nibali (Ita) Bahrain-Merida, at 2-47
6. Bob Jungels (Lux) Quick-Step Floors, at 3-56
7. Domenico Pozzovivo (Ita) AG2R, at 4-05
8. Ilnur Zakarin (Rus) Katusha, at 4-17
9. Andrey Amador (CRC) Movistar, at 4-39
10. Steven Kruijswijk (Ned) LottoNL-Jumbo, at 5-19
11. Geraint Thomas (GBr) Team Sky, at 5-33
16. Adam Yates (GBr) Orica-Scott, at 6-58
Thank you for reading 20 articles this month* Join now for unlimited access
Enjoy your first month for just £1 / $1 / €1
*Read 5 free articles per month without a subscription
Join now for unlimited access
Try first month for just £1 / $1 / €1