Following Monday's rest day, Dutchman Dumoulin went into the 222 kilometres stretch from Rovetta to Bormio, which included a double ascent of the Stelvio, with an advantage of two minutes and 41 seconds over Movistar's Nairo Quintana.
However, the Team Sunweb rider had to stop with 33km to go because of stomach problems as he dashed onto a grass ditch and striped off to answer a call of nature.
With the chasing pack continuing, Dumoulin remounted his bike on up the Umbrail Pass and bravely chased down the leaders to eventually cross with a lead of 31 seconds.
Afterwards the Dutchman told Eurosport UK: "I just had some problems and needed a dump, I could not hold it any more."
It was after the first time on Stelvio, I started to feel it in the downhill and I just had to stop, it was not possible to continue any more."
Dumoulin felt he should have been given an opportunity to close back on the peleton once he was able to continue after his unplanned toilet stop.
He added: "I decided to fight and fight, and then take conclusions after the finish, that is what I did, and I think that is good but I am very disappointment with the day of course.
"I was with the strongest today. I could have easily been with Nibali and Quintana, I just lost it because I had a problem. That's, uh, sh**."
As the race continued, it was Nibali who took a two-man sprint over the final 100kms ahead of Team Sky's Mikel Landa, who took over as King of the Mountains, to deliver a first Italian victory on the 100th staging of the race.
Quintana took third place to eat into Dumoulin's advantage.
Bahrain-Merida rider Nibali said: "I didn't think about being the first Italian to win a stage; what counted was having a strong team, making a big effort and staying up there.
"I am closer now but Dumoulin has the advantage of the time trial in Milan."
Earlier in the Queen stage, Astana's Luis Leon Sanchez was first over the opening climb of the day on the Passo del Mortirolo, appearing to be allowed to take the 1,764m category 1 climb which was named in honour of team-mate Michele Scarponi following his death last month after a training accident.
Britain's Adam Yates (Orica) sits 10th in the general classification.
Wednesday's 17th stage will run over 219 km from Tirano to Canazei.
