After Haslam held off Byrne to win the opening race and continue Kawasaki's clean sweep in 2017, scooping his third win of the season, the Ducati man hit back with a fine triumph of his own.
But the race will also be recalled for a huge crash as Haslam appeared to clip James Ellison with his bike sent flying.
Ellison was also forced to retire with damage, but fortunately both walked away from the incident and headed for the medical centre for precautionary checks.
Byrne was left to clinch victory in fine fashion - his first of the season as he climbs to seventh in the overall standings.
“The first race was a bit frustrating," Byrne said. "I knew that I could run at the pace that I managed in race two but for some reason towards the end of race one we started having some problems which meant I couldn’t take it to Leon.
"But the way things have gone so far this season it was important to take that second place, take those 20 points and podium points rather than being upside down trying to race Leon.
"Race two was a different scenario, I felt really comfortable and got to the front and got into the rhythm and a pace I knew I could run. Once I got out in front I just concentrated on hitting my markers and bringing it home.”
Haslam leads the championship from Kawasaki team-mate Luke Mossey with Christian Iddon in third.
Race two result
Shane Byrne (Be Wiser Ducati)
Glenn Irwin (Be Wiser Ducati) +5.218s
Jason O'Halloran (Honda Racing) +5.309s
Christian Iddon (Tyco BMW) +5.574s
Luke Mossey (JG Speedfit Kawasaki) +5.881s
Josh Brookes (Anvil Hire TAG Yamaha) +6.025s
Peter Hickman (Smiths Racing BMW) +19.130s
Tommy Bridewell (Team WD-40 Kawasaki) +19.130s
John Hopkins (Moto Rapido Ducati) +20.293s
Billy McConnell (Quattro Plant FS-3 Kawasaki) +20.431s
Leon Haslam (JG Speedfit Kawasaki) 111
Luke Mossey (JG Speedfit Kawasaki) 108
Christian Iddon (Tyco BMW) 86
Josh Brookes (Anvil Hire TAG Yamaha) 67
Glenn Irwin (Be Wiser Ducati) 63
Jason O'Halloran (Honda Racing) 61
Read the original article on Eurosport: Byrne wins dramatic race two at Oulton as Haslam crashes out