Riding the 1000cc Hydrex Bike Animal Honda, Martin was well in command to the tune of ten seconds and controlling the race when a problem forced him out on lap four at Sulby Village.
The race started bizarrely when Guy arrived at the start line late due to no fault of his own and despite losing nine seconds at the start, he smashed the class lap record with a lap of 129.103mph from a standing start to lead by four seconds.
Main rival John McGuinness went out with a misfire on lap two at Glen Helen as Martin continued to increase his lead on Shaun Muir's machine and with another record lap of 129.540mph and a fantastic pit stop by the team, saw him increase his advantage to thirteen seconds.
In a position to control the race, Guy kept the gap between him and second placed Cameron Donald to around ten seconds and that was the case half way round on lap four when the bike cried enough leaving his dreams of his first ever TT win shattered.
Donald went on to take a debut victory ahead of team mate Bruce Anstey with Adrian Archibald in third place but at least Martin had the consolation of retaining the lap record as neither Donald nor Anstey went faster on the final lap.
Guy is hoping to make amends for his disappointment when he competes in the Superstock TT which gets underway at 10.45 on Monday followed by the Supersport TT at 13.15.
Dainese Superbike Race Result
1, Cameron Donald (Suzuki), 2, Bruce Anstey (Suzuki) +00m:09:62s, 3, Adrian Archibald (Suzuki) +01m:23:29s, 4, Gary Johnson (Honda) +01m:45:34s, 5, Ryan Farquhar (Kawasaki) +02m:05:35s, 6, Ian Lougher (Yamaha) +02m:11:11s, 7, Keith Amor (Honda) +02m:50:47s, 8, Daniel Stewart (Honda) +02m:57:33s, 9, Carl Rennie (Suzuki) +03m:18:63s, 10, Steve Plater (Yamaha) +03m:34:16s.