Armitstead finished second at the end of a pulsating 140-kilometre race, which featured two climbs of Surrey’s Box Hill.
With the peloton cast adrift, the 23-year-old from Otley, was in line for Britain’s first medal of the home Games, but the question remained which colour.
Armitstead positioned herself behind the Dutchwoman entering the finishing straight but Hollan’ds Marianne Vos was strong enough to hold off the Briton, who had to settle for a glorious silver medal.
Russia’s Olga Zabelinskaya was third.
“I’m so shocked, it feels really strange,” said Armitstead as she climbed from her bike.
“My team-mates did exactly what they were asked and I can’t thank them enough. Emma [Pooley] attacked on Box Hill which was great as I needed an aggressive race.
“I’m so glad I committed to that break. I was umming and aahing but I’m really happy I went with it. I should’ve jumped earlier in the sprint, but never mind.
“We discussed things beforehand about the fast roads coming in to the finish and we thought that once you get a committed break up front it makes it hard at the back.
“I just went with it and I’m so happy it came off.
“Vos was always the one to watch so I was following her around. We both got in an early break, but I thought it was too early so I waited.
“Winning this race in front of my family and friends is the most special thing I’ve ever experienced in my life; it’s so crazy and so inspiring!”
Britain’s second medal came in the swimming courtesy of the country’s darling of Beijing, Rebecca Adlington.
Starting from lane eight in the defence of her 400m freestyle title, the 23-year-old from Mansfield won the bronze medal.
Pre-race gold medal favourite Camille Muffat lived up to the hype and did not disappoint, setting a new Olympic record of 4:01.45 as she claimed her first Olympic title ahead of American Allison Schmitt.
Adlington said: “After only qualifying in eighth this morning I didn’t know what to expect, and tonight there was no pressure on me at all.
“I know everyone else wanted to say, ‘Oh you got the gold in Beijing,’ but to me I was not expecting that at all, so I am so, so pleased with that tonight.”
Beijing bronze medallist and one of the county’s big hopes for a medal, Jo Jackson of Northallerton was eliminated from the 400m freestyle after finishing seventh in her heat.
The City of Leeds diving duo Rebecca Gallantree, 27, and Alicia Blagg, 15, finished seventh in 3m synchro final during the afternoon.
Middlesbrough-born and Rotherham-based Paul Drinkhall pulled off one of the finest wins of his table tennis career to move into the third round of the men’s singles.
Drinkhall, who eased to victory against Kuwait’s Ibrahem Al-Hasan yesterday, was the underdog heading into today’s encounter versus Singapore’s Zi Yang, who sits 53 places ahead of him in the ITTF world rankings.
Yet, despite having never defeated Yang, the 22-year-old was bullish about his chances yesterday - and his confidence proved justifiable.
Indeed, the Brit sealed an astonishing 4-1 (11-7, 11-7, 11-8, 4-11, 11-9) triumph to set up a mouth-watering clash with Germany’s world No 12 Dimitrij Ovtcharov.
Rotherham-based Joanna Parker was knocked out of the second round of the women’s individual table tennis tournament.
Parker lost to German Kristin Silbereisen at The Excel this morning.
After a convincing opening day win on Saturday, 25-year-old Parker could not repeat the magic against Silbereisen and went down 4-1.
Parker accepted she had lost to the better player.
She said: “Kristin’s first ball is strong and my returns were not consistently good enough. She is an attacker and I am more of a defender and she took advantage very early on.
“She is a better player than me right now but I’ve learned so much and intend to take that into the team event.”
There was better news at the rowing heats at Eton Dorney as Kat Copeland, 21, from Stokesley, North Yorkshire, and Sophie Hosking won their lightweight double sculls heat in impressive fashion.
However, Rotherham’s Amy Oliver and women’s Great Britain archery squad have been knocked out of the team competition at Lord’s after losing 215-208 to Russia.
Oliver is back in action on Wednesday in the individual event.
Sheffield Sharks’s Nate Reinking scored seven points as the Great Britain basketball team began their campaign with a 95-75 defeat against Russia.
NBA all-star Loul Deng led the way for Team GB with 26 points, but even with the Chicago Bulls forward in their line-up it was always going to be a tall order for the hosts against an established nation.
Team GB next play Brazil tomorrow afternoon.
The men’s volleyball team, led by Hull’s Ben Pipes were beaten 3-0 in sets by Bulgaria in their first game this morning.
The team, that also contains Halifax’s Kieran O’Malley, next face Australia on Tuesday night.
Pipes said: “Personally I couldn’t find my rhythm early on. I let the team down in the first set. We started
playing our game in the third set. Our reception was good and our blocking was OK.
“I don’t think I was nervous (at the start) - everybody was pumped.”
And as the GB water polo team made their long-awaited comeback, the Leeds duo of forward Adam Scholefield, 27, and goalkeeper Ed Scott, 24, played as the hosts lost 13-4 to Romania.