The steep final climb was always likely to separate the race's three leading men, and so it proved, with only a handful of the biggest names left at the front of the field in the final few kilometers.
But Valverde - who would be outright leader by a further distance were it not for a one-minute time penalty incurred earlier in the tour - proved too powerful for his rivals, winning by a 13-second margin.
The intense gradient of the climb whittled down the front group to a core of five quality riders, with Adam Yates and Marc Soler joining Valverde, Froome and Contador in a heavyweight clash that bodes well for an entertaining summer season.
Froome, making his first major appearance of the year, did well to hang on in the face of frequent attacks by Contador and Valverde, but the latter's legs held firm as he accelerated away to a statement victory.
Valverde also won stage three at the top of La Molina on Wednesday, a day after he and his Movistar team mates were handed a one-minute penalty for illegal pushing during Tuesday's team time trial.
Valverde, who won the Tour of Catalonia and Tour of Spain in 2009, takes the leader's jersey from American Tejay van Garderen.
Results from Volta a Catalunya (Valls - Tortosa, 182 km) on Friday
- 1. Alejandro Valverde (Spain / Movistar) 4:14:52"
- 2. Chris Froome (Britain / Team Sky) +13"
- 3. Alberto Contador (Spain / Trek)
- 4. Marc Soler (Spain / Movistar) +25"
- 5. Adam Yates (Britain / Orica) +32"
- 6. Daniel Martin (Ireland / Quick-Step) +46"
- 7. David Gaudu (France / FDJ) +58"
- 8. Hugh Carthy (Britain / Cannondale) +1:04"
- 9. Jakob Fuglsang (Denmark / Astana) +1:11"
- 10. Steven Kruijswijk (Netherlands / LottoNL)
- 11. Romain Bardet (France / AG2R)
- 12. Michael Woods (Canada / Cannondale) +1:17"
- 13. Rafal Majka (Poland / BORA)
- 14. Geraint Thomas (Britain / Team Sky) +1:25"
- 15. Pierre Latour (France / AG2R) +1:29"
Classification from Volta a Catalunya after Stage 5 on Friday
- 1. Alejandro Valverde (Spain / Movistar) 17:44:27"
- 2. Chris Froome (Britain / Team Sky) +21"
- 3. Alberto Contador (Spain / Trek) +47"
- 4. Marc Soler (Spain / Movistar) +1:00"
- 5. Adam Yates (Britain / Orica) +1:15"
- 6. Tejay van Garderen (U.S. / BMC Racing) +1:18"
- 7. Geraint Thomas (Britain / Team Sky) +1:34"
- 8. Samuel Sanchez (Spain / BMC Racing) +1:59"
- 9. Daniel Martin (Ireland / Quick-Step) +2:13"
- 10. Steven Kruijswijk (Netherlands / LottoNL) +2:40"
- 11. Bauke Mollema (Netherlands / Trek) +2:43"
- 12. Jarlinson Pantano (Colombia / Trek)
- 13. Carlos Verona (Spain / Orica) +2:44"
- 14. George Bennett (New Zealand / LottoNL) +2:47"
- 15. Romain Bardet (France / AG2R) +2:49"
Read the original article on Eurosport: Valverde drops Contador and Froome as stage 5 victory gives him race lead