Defending World Champion Marc Marquez started in pole position ahead of the Ducati of Andrea Dovizioso and Lorenzo while Championship leader Rossi started P7, but it was a different story on race day.
The soaring temperatures in the province of Maine led to one of the biggest MotoGP crowds at the Le Mans circuit in recent history with the 93 000 plus spectators causing a pretty amazing atmosphere.
Dovizioso made a great launch after the lights went out, but it was Lorenzo who led after the first lap ahead of Ducati riders Dovidizo and Andrea Iannone with Marquez only fourth after running wide at Turn 3 while Rossi was fifth and Cal Crutchlow down to eighth.
A bit further back, Dani Pedrosa's return to racing following surgery on his arm didn't get off to the best of starts as he crashed at Turn 4 on lap two, although he managed to get back on his bike to slot in at the back of the grid.
Stefan Bradl also went down at Turn 6 and his race was over and he was soon followed into the garage by Mike De Meglio on the Avintia Racing and Estrella Galicia 0,0 Marc VDS's Scott Redding.
Aleix Espargaro, who was on the grid despite being in pain following his heavy crash in Free Practice on Saturday morning, also made an early visit to the pits and sadly he also failed to return to the track.
Lorenzo continued to set the pace at the front ahead of the two Ducatis while Marquez dropped to sixth after another mistake.
Rossi was the big entertainer as he first outbraked Iannone at Turn 11 to move up to third place and then he picked off the other Ducati of Dovizioso at Turn 13 on lap 14 to make it a Yamaha 1-2.
Bradley Smith on the Monster Yamaha Tech 3 managed to open a gap of over two seconds over the struggling Honda of Marquez with Pol Espargaro, Yonny Hernandez, Danilo Petrucci and Nicky Hayden completing the top 10.
With seventh laps to go, the two Yamahas continued to be comfortable at the front but the battle for fourth place heated up with Iannone, who was in pain after dislocating his shoulder earlier in the week, starting to come under pressure from Smith and Marquez.
With six laps to go Marquez dived on the inside of both Smith and Iannone to claim P4. Smith initially got the better of Iannone as well, but the Ducati driver hit back to take P5.
It was a seesaw battle between Marquez and Iannone after that, but it was the Repsol Honda man who eventually came out tops ahead of the Ducati rider with Smith sixth.
Ahead of them, it was a pretty straightforward victory for Lorenzo as he eased to his second win of the season and fifth at Le Mas ahead of his team-mate Rossi and Dovizioso a comfortable third.
The rest of the top 10 saw Pol Espargaro, Hernandez, Maverick Vinales and Petrucci.
Rossi still leads the standings, but Lorenzo is now just 15 points behind his team-mate while Dovidizo drops to third.
1 Jorge LORENZO Movistar Yamaha MotoGP 43'44.143
2 Valentino ROSSI Movistar Yamaha MotoGP 3.820
3 Andrea DOVIZIOSO Ducati Team 12.380
4 Marc MARQUEZ Repsol Honda Team 19.890
5 Andrea IANNONE Ducati Team 20.237
6 Bradley SMITH Monster Yamaha Tech 3 21.145
7 Pol ESPARGARO Monster Yamaha Tech 3 35.493
8 Yonny HERNANDEZ Pramac Racing Ducati 39.601
9 Maverick VIÑALES Team SUZUKI ECSTAR 41.571
10 Danilo PETRUCCI Pramac Racing 42.789
11 Nicky HAYDEN Aspar MotoGP Team 53.636
12 Loris BA Athinà Forward Racing 1'00.617
13 Hector BARBERA Avintia Racing 1'04.272
14 Eugene LAVERTY Aspar MotoGP Team 1'05.259
15 Alvaro BAUTISTA Aprilia Racing Team Gresini 1'05.515
16 Dani PEDROSA Repsol Honda Team 1'20.907
17 Alex DE ANGELIS Octo IodaRacing Team ART 1'21.663
18 Marco MELANDRI Aprilia Racing Team Gresini 1 Lap
Jack MILLER CWM LCR Honda 14 Laps
Karel ABRAHAM AB Motoracing 14 Laps
Cal CRUTCHLOW CWM LCR Honda 21 Laps
Scott REDDING EG 0,0 Marc VDS 25 Laps
Mike DI MEGLIO Avintia Racing 25 Laps
Aleix ESPARGARO Team SUZUKI 26 Laps
Stefan BRADL Athinà Forward Racing 27 Laps