A performance he described as the best of his life gave Hill the win he demanded of himself from the Hungarian Grand Prix to resuscitate his world championship campaign.
Michael Schumacher's retirement, three laps from the end, means the Englishman's challenge is positively vibrant again, the gap between them reduced to 11 points with seven races remaining.
Life promises to get better still for Hill this week. Williams- Renault are due to announce their 1996 driver line-up on Wednesday and he appears certain to be paired with the French Canadian, Jacques Villeneuve.
David Coulthard, Hill's current partner, could never keep pace at the front and inherited second place after Schumacher pulled off. Whether that will be enough to pave the way to McLaren-Mercedes or Ferrari remains to be seen. Coulthard said: "I just could keep up with Damon. I was amazed he was able to get so far away."
The announcement of Schumacher's move from Benetton-Renault to Ferrari is also scheduled for this week, but little other than the completion of that pounds 16m contract has gone right for the German of late.
He struggled all weekend to stay in touch with Williams in qualifying, and when he found extra momentum leaving the circuit on Saturday evening was stopped for speeding. At least the fine of around pounds 5 should not hurt too much.
In the race, his sluggish start left him stranded behind Coulthard and for 13 frustrating laps he was helpless as Hill opened a gap.
The Scot's error allowed the champion through, only for him to confront another problem in the pits.
His crew were unable to supply as much fuel as planned because of a problem on the rig. That forced Schumacher to adjust his schedule, condemning him to run on two badly worn sets of tyres.
In the circumstances he could have settled for second place, but with six valuable points seemingly assured, his car capitulated and he parked on the grass. It was his first failure to finish for mechanical reasons in 17 races.
Schumacher's catalogue of calamities contrasted with the perfect sequence of events enjoyed by Hill. The Englishman was fastest in qualifying, his race strategy ran with scarcely a blip and for only the second time in 10 opportunities, he capitalised on pole position.
He had just one anxious moment, twitching at the chicane which tripped Coulthard, but he resisted Schumacher's lunge and from that moment he was in command.
Schumacher's demise enabled Hill to saunter in more than half a minute clear of Coulthard. Ferrari's Gerhard Berger, fighting off Johnny Herbert in the other Benetton, was promoted to third yards from the flag as Rubens Barrichello's Jordan-Peugeot expired. Heinz-Harald Frentzen, in a Sauber Ford, was fifth and Olivier Panis, of Ligier Mugen, was sixth.
It all started for Hill here two years ago, with his first Formula One win, and he has emerged from this latest race over a the torturous, sinewy Hungaroring with a success that could prove the most significant of his career.
The mishaps of Silverstone and Hockenheim threatened to sabotage his title aspirations, but his response here was as exhilarating as it was defiant. It also served to give the championship a desperately needed shot in the arm.
Hill said: "This is my best race ever. I showed I could do the business from qualifying to the chequered flag. There was no way I could afford less than first place and Michael's not finishing was a bonus. It's a bit of a pay-back day for me.
"When you bust a gut for 77 laps and get on the rostrum and get that sort of reception it's just great. It's been a fantastic day. It was a tremendous race and Michael put the pressure on, but I proved I could beat him one-on-one. It's been a great weekend for the team to get a one- two.
"Everything went to plan and I was pretty well in control, but I was mightily relieved when Michael went out. When you're having to contend with back markers, it was never over till he dropped out.
"This has to be the start of the revival for me. The only way to win the championship is to keep winning races and I've always believed I could be champion."
There were also timely words of appreciation from his boss, Frank Williams, who said: "Damon may have come in for some criticism after Silverstone and Hockenheim and probably felt under pressure this weekend, but this was brilliant."
The mood in Schumacher's camp was very different. The German said he toiled merely to keep his car on the road in the latter stages, denying him the facility to attack Hill. His ultimate demise took a heavy toll. "It is a blow for the championship," Schumacher said. "It is disappointing after working so hard to be second and fighting for first.
"Now we have a lot of hard work to do before the next race and for the rest of the season."
The usually smooth-running operation at Benetton had been upset by that first, ill-starred pit stop for Schumacher, and Herbert, expected to be discarded by the team, expressed his exasperation over time lost when he came in for fuel and fresh tyres.
Disappointment, too, for Mark Blundell, in a McLaren, Martin Brundle in a Ligier, and Jordan's Eddie Irvine. All were brought to premature halts as points beckoned.
The most unlucky driver, however, had to be the Japanese, Taki Inoue, who climbed out of his stricken Footwork Hart, and was knocked over by a safety car as he reached for a fire extinguisher. Three months ago he was tipped out of his broken car by a pace car at Monaco. Yesterday he was taken to the medical centre but had only a bruised leg.
Touring Car Championship, page 21
Result from the Hungaroring
1 D Hill
(GB) Williams-Renault 1hr 46min 25.271sec
2 D Coulthard
(GB) Williams-Renault +33.398sec
3 G Berger
(Aut) Ferrari +1 lap
4 J Herbert
(GB) Benetton-Renault +1 lap
5 H-H Frentzen
(Ger) Sauber-Ford Zetec +1 lap
6 O Panis
(Fr) Ligier-Mugen Honda +1 lap
7 R Barrichello (Bra) Jordan-Peugeot +1 lap
8 L Badoer (It) Minardi-Ford +2 laps
9 P Lamy (Por) Minardi-Ford +3 laps
10 J-C Boullion (Fr) Sauber-Ford Zetec +3 laps
11 M Schumacher (Ger) Benetton-Renault +4 laps
12 A Montermini (It) Pacific-Lotus-Ford +4 laps
13 E Irvine (Irl) Jordan-Peugeot +7 laps
Not classified: 14 M Brundle (GB) Ligier-Mugen Honda 67 laps completed; 15 M Salo (Fin) Tyrrell-Yamaha 58; 16 M Blundell (GB) McLaren-Mercedes 54; 17 U Katayama (Japan) Tyrrell-Yamaha 46; 18 M Papis (It) Footwork- Hart 45; 19 J Alesi (Fr) Ferrari 42; 20 P Diniz (Braz) Forti-Ford 32; 21 T Inoue (Japan) Footwork-Hart 13; 22 R Moreno (Braz) Forti-Ford 8; 23 G Lavaggi (It) Pacific-Ford 5; 24 M Hakkinen (Fin) McLaren-Mercedes 3.
Fastest lap: Hill 1:20.247 (110.366 mph).
World championship (after 10 races)
1 Schumacher 56pts
2 Hill 45
3 Alesi 32
4 Coulthard 29; 5 Herbert 28; 6 Berger 25; 7 Panis 8; 8= Barrichello, Frentzen 7; 10 Irvine 6; 11= Blundell, Hakkinen 5; 13 Brundle 3; 14 Boullion 2; 15= Morbidelli, Suzuki 1.
Constructors' championship: 1 Benetton 74; 2 Williams 68; 3 Ferrari 57; 4 Jordan 13; 5 Ligier 12; 6 McLaren 10; 7 Sauber 9; 8 Footwork 1.Reuse content