Bruce Anstey put down a marker on the Padgetts Motorcycles ex-Grand Prix YZR500 Yamaha with a blistering 122.523mph lap on Wednesday during Classic TT practice.
The 45-year-old, riding on a high following a double in the Superbike and Supersport races at the Ulster Grand Prix, demoted Michael Dunlop (Team Classic Suzuki) to second place on the time sheets after showing what the awesome two-stroke GP racer is capable of on the Mountain Course.
The pair look poised to battle it out in Monday's Motorsport Merchandise Formula 1 race with little to separate them at present, with Ulsterman Dunlop lapping at 121.173mph on the XR69 to record his best lap of the week so far.
Anstey, though, says there is more to come from the YZR500, which is running in the Valvoline Padgetts Racing colours.
“I've got a massive smile,” he said. “It's handling pretty good but it gets a bit lively once the fuel load goes down.
“We're taking it slowly and getting there. The bike was flying tonight and there's more to come.”
Anstey's first lap on Monday ended abruptly at Ramsey but he managed a lap at 114mph on Tuesday before stopping at Creg-ny-Baa on his second, quicker lap.
However, the experienced Kiwi marked himself out as a major threat to Dunlop on Wednesday as he upped the pace to notch the best lap of the week to date.
Bournemouth's James Hillier was second fastest on the Jackson Racing Kawasaki ZXR750 at 119.369mph followed by Russ Mountford on the Team York Racing Suzuki (119.127mph) and Steve Mercer (Mistral Kawasaki), who went round at 118.298mph.
Winfield Racing pair Ryan Farquhar and Gary Johnson lapped at 117.755mph and 115.127mph on the Harris F1 Yamahas respectively.
Northern Ireland racer Farquhar set a superb benchmark on the Winfield Paton as he lapped at 111.102mph, narrowly outside last year's winner Olie Linsdell's lap record.
Morecambe man John McGuinness had also been flying on the second of the Winfield Paton machines but the 21-times Isle of Man TT winner experienced problems with the machine at Ramsey.
Alan Oversby was second quickest (107.239mph) with Michael Rutter – a late replacement for the injured Dan Kneen – next on the G50 Seeley at 107.067mph.
William Dunlop (101.271mph) topped the 350c times on the Davies Motorsport Honda and was the only rider over 100mph from Wales' Ian Lougher, who nudged 99.689mph on the Ripley Land Racing Drixton Honda.