Sagan, 22, completed the 209.6 kilometre Sonora to Clovis fourth stage in five hours, 18 minutes and eight seconds as temperatures soared to 35 degrees Celcius.
Australian Heinrich Haussler finished second for the fourth straight day, with compatriot Michael Matthews third.
"Today was a harder stage," said Sagan. "I was thinking it was not possible for me to win, but (team-mate) Daniel Osa said, 'today we work for you.'"
The Slovakian, who registered his seventh stage win of the season and the 30th of his four-year professional career, now leads Haussler by 16 seconds with four stages of the 1,184 km (735 miles) race remaining.
American Jeff Lounder was third overall, trailing by 34 seconds, heading into Thursday's potentially decisive time-trial in Bakersfield.
"I think tomorrow I will say good-bye to the yellow jersey," said Sagan. "But maybe I'll recover and try for another stage later in the race."
Sagan's win left him 40 seconds ahead of the pre-race favourites, including defending champion, Chris Horner of the United States.
Horner, who defeated former team-mate Levi Leipheimer by 38 seconds last year, finished 27th in the main field and was 18th overall.
Haussler, a former Tour de France stage winner, again came up short in his last-ditch effort to pass Sagan in the sprint finish.
"I felt really good during the stage today," Haussler said.
"I was comfortable on the climbs. And the team had another strong day despite the brutal heat. Sagan is the fastest guy at the moment and he proved it again today.
"I believe we've got one more opportunity for a sprint. And I'm very motivated, but there's some serious racing to get through in the next few days."