The race was rescheduled from the previous day and Hislop, one of the first to quit in Saturday's rain, was always ahead in the demanding six- lap 226.38-mile race, opening up a 22sec advantage on the first lap and doubling it on the second.
The 32-year-old Scot, who now lives on the island, won at an average speed of 119.54mph with Ulster's Phil McCallen having to be happy with second place.
'He settled into the rhythm and kept going while I just could not get into the flow,' McCallen said.
Joey Dunlop came in third, and was immediately awaiting news of his younger brother, Robert, who had crashed at Ballaugh on the third lap while he was lying in third place.
He was airlifted to Noble's Hospital in Douglas for treatment to a fractured right arm and right leg.
Llanelli's Nigel Davies, who was leading Saturday's rain-soaked race when it was stopped, took sixth place on his Honda RC30 but last year's winner, Nick Jefferies, retired his 1000cc Britten with mechanical problems on the third lap.
ISLE OF MAN TT Formula One race (six laps): 1 S Hislop, Honda 1hr 53min 37.2sec, 119.54mph; 2 P McCallen, Honda 1:55:01.8, 118.08mph; 3 J Dunlop, Honda 1:56:23.6, 116.69mph; 4 G Radcliffe, Honda 1:59:00.2, 114.13mph; 5 I Duffus, Yamaha 1:59:36.0, 113.56mph; 6 N Davies, Honda 1:59:39.2, 113.51mph. Fastest lap: P McCallen, 18min 32.6sec, 122.08mph.Reuse content