Rossi, rocked by the news of his stepfather's suicide in Italy, now holds a 38 point lead over Lorenzo and can afford to lose 13 points to the Spaniard in next weekend's Malaysian Grand Prix and still claim his ninth world title before the Valencia season finale.
After being overtaken by Stoner and Rossi, Pedrosa rode to a lonely third place, a massive 22.6sec from victory but ten seconds in front of satellite Honda rider Alex de Angelis.
Monster Yamaha Tech 3's Colin Edwards fought back from a poor first lap to finish where he began, in fifth - with Pedrosa's factory Honda team-mate Andrea Dovizioso sixth, Hayate's Marco Melandri seventh and LCR Honda's Randy de Puniet eighth.
de Angelis, de Puniet and Loris Capirossi are now all tied for seventh in the world championship standings.
Capirossi was demoted to the back of the grid after becoming the first rider to break the new MotoGP engine limit and went on to finish the race in twelfth place, one spot behind Rizla Suzuki team-mate Chris Vermeulen.
Mika Kallio held sixth for the first half of the race, before slipping back to ninth at the flag for Pramac Ducati, with Toni Elias tenth on the second San Carlo Honda Gresini machine.
James Toseland was pulled in to serve a jump start penalty on lap ten - something the Tech 3 rider indicated he didn't deserve - and went on to finished 14th, a fraction behind Scot Honda's Gabor Talmacsi. A lapped Hayden was 15th and last.
Niccolo Canepa, who injured his arm in Friday practice, watched the race from the Pramac Ducati pits and is also expected to miss the Malaysian Grand Prix.
Aleix Espargaro, who has taken Canepa's seat for 2010, is on standby to replace the Italian should he be unfit for Sepang.
Australian Grand Prix:
4. de Angelis
8. de Puniet