The 25-year-old Yamaha rider, recording his second win of the season and 19th MotoGP in all, came home clear of Italian great Valentino Rossi on a Ducati while defending world champion Casey Stoner of Australia was third on a Honda.
For 33-year-old Rossi it was only his second podium finish in two years and could not have come at a better time as Stoner is due to retire at the end of the year and the Italian suggested he would be interested in the ride.
Lorenzo made a terrific start shooting past both pole sitter Dani Pedrosa and Stoner while behind there was an embarrassing start for the sole French rider Randy de Puniet, who wobbled on the slick surface and, not helped by a bump with American Ben Spies, came off his bike right in front of the packed stands.
While he regained the paddock and got on another bike up front Lorenzo established a four second lead over Stoner while Pedrosa's hopes of winning his first ever French Grand Prix quickly disappeared as he slipped the whole way down to sixth.
It was Rossi and Cal Crutchlow who made the most progress as the Italian superstar showed form of past years to move into third while Crutchlow, quickest in the morning warm-up, came from fifth row on the grid to overtake team-mate Andrea Dovizioso to go fourth with 19 laps to go.
The trio conducted a thrilling battle for third spot with Crutchlow and Dovizioso passing Rossi before the Englishman was overtaken by his Italian team-mate and Rossi then passed Crutchlow to go fourth.
Ahead of them Stoner was eating into Lorenzo's lead reducing it to around two seconds with 13 laps remaining as the rain stopped but the Spaniard stepped it up a gear and pushed it to 3.5sec a lap later.
Crutchlow's challenge for the podium came to a woeful end with 10 laps to go as he slid off at a corner and while he managed to get his bike back up and running his hopes were gone and he faded to eighth.
Rossi, though, was riding brilliantly and overtook Dovizioso and set off in pursuit of the first two.
Lorenzo, though, was making no mistake up front as he hammered home his advantage and with eight laps remaining he was over six seconds ahead and away with the fairies.
Stoner eased up acknowledging that Lorenzo had the race in the bag, but Rossi had not given up hope of taking second and reduced the Australian's lead to two seconds with six laps remaining.
With four laps to go the charismatic Italian was right on Stoner's shoulder while disaster struck Dovizioso as he like Crutchlow went into the gravel, restarted but came back on in seventh spot.
Rossi's thrilling duel with Stoner came to a head entering the final lap when he feinted one way and then went the other to pass Stoner and fended him off for the remainder of the lap and lay down a marker to replace the Australian next year on the bike.