The greatest Olympian of all time remained on course to emulate his incredible eight-gold haul from Beijing four years ago with another powerful display in America's midwest.
Showing no sign of fatigue or weariness despite his gruelling schedule, the 26-year-old powered away from his rivals over the final two laps to win in one minute 53.65 seconds, more than two seconds outside his world record but still the fastest time in the world this year.
"It's not a good enough time to win a gold medal, but I think I'm okay with it," said Phelps.
"Today was the best my stroke has felt throughout the whole meet. So, in all I'm pleased, but I think I need to go faster if I want to win that at the Olympics."
Phelps's Baltimore club team-mate Allison Schmitt, who is rapidly emerging as a star in her own right, clinched her second individual swim in the English capital when she won the women's 200m freestyle final ahead of teenage sensation Missy Franklin.
Schmitt followed up her impressive victory in the 400m freestyle on Monday when she led all the way to win the 200m in 1:54.40, the quickest time recorded since synthetic bodysuits were banned at the end of 2009.
Franklin, who won the 100m backstroke final on Wednesday, finished second in 1:56.79 to seal her second individual swim and her third overall with the top six finishers all securing places in the 4x200m freestyle relay.
Caitlin Leverenz won the women's 200m individual medley to earn her second swim in London after finishing runner-up in the 400m medley. Ariana Kukors, the world record holder, flashed home over the last length to grab second spot.
Phelps has now qualified for London in five events and barring any slip-ups, he will swim the exact eight-event programme he contested at each of the last two Olympics, winning six golds and two bronze medals in Athens then eight golds in Beijing.
But of all his events, the 200m butterfly is his favourite and the one he has dominated the most. It was the only event he qualified for at the 2000 Sydney Olympics when he was just 15 and it was the event where he set his first world record and won his first world title.
He won the event at five world championships, has held the world record for more than a decade and won the gold medal at the past two Olympics.
"This is my fourth Olympics Games in this event, so it's special to me, special to my family, special to my mom," Phelps said.
"I have a couple of weeks to perfect some things that I'm going to need if I want to end with a good one."
Tyler Clary, who had finished third behind Phelps and Ryan Lochte in the 400m medley, qualified for his first Olympics when he finished second.
Lochte qualified equal fifth fastest in the semi-finals of the 100m freestyle but later withdrew from the final because he is already swimming the 200m medley and 200m backstroke semis on Friday night.
Lochte could still swim in the 4x100m freestyle relay in London if his time in the semis is not bettered by at least five other swimmers.
"We made a plan going into this meet that I was just going to do semi-finals of 100m free and whatever happens, happens," he said.
Lochte's withdrawal provided a lifeline for Jason Lezak to swim the final. The 36-year-old, whose stunning anchor leg swim in Beijing set the platform for Phelps's record eighth gold medal, was a reserve for the final after qualifying ninth overall.