The Mercedes man had qualified on pole for the seventh time in eight races but was beaten off the line by team-mate and title rival Nico Rosberg – who then took the chequered flag to close the gap in the championship.
Hamilton did not appear to have the pace to close the gap up front and his hopes were dashed when he was hit with a five-second time penalty for cutting the corner as he exited the pit lane.
For Rosberg it was a second successive win at the Red Bull Ring and, although he was unhappy with his start, Hamilton conceded he lost to the better man.
“I had a problem with the revs,” he said.
“I took my foot off the gas and the throttle was still on. It was not the best way to start the race but it is something we will work on to improve on my side of the garage.” Hamilton was tucked in close behind Rosberg for the first lap but could not make a move as the safety car came out following a big collision between the Ferrari of Kimi Raikkonen and Fernando Alonso’s McLaren.
Raikkonen confirmed he had suffered wheel-spin at turn two as he collected the McLaren and saw former team-mate Alonso come flying over the top of his cockpit.
It triggered another dire weekend for McLaren, who also saw Jenson Button retire at the end of lap nine – after both drivers had already been hit with grid and time penalties for updating their Honda power units.
Up front, Rosberg took the 11th win of his career and was delighted with his afternoon as he closed to within 10 points of Hamilton in the championship.
“I had a good start and then good pace in the race,” he said.
“That is what I’m most happy about. I think I have found what I needed to find last year in terms of in the races and that’s what is really working out for me this year. It’s an awesome feeling to win again here. I’m very happy.” Mercedes non-executive chairman Niki Lauda also hailed Rosberg’s drive and insisted he was good enough to beat Hamilton even without the time reprimand.
“Nico was outstanding today, I have to say,” the three-time world champion said.
“He would have won it without Lewis’ penalty. We’re very happy for them both.” Hamilton said he had “no idea” that he had crossed the line at the pit-lane exit but admitted Rosberg had the beating of him after both had spun at the end of Saturday’s eventful qualifying to leave the Brit on pole.
Behind the dominant Silver Arrows, Felipe Massa took his first podium of the season as he hung on to third place with the Ferrari of Sebastian Vettel closing in on his Williams.
Massa’s team-mate Valtteri Bottas came home a distant fifth with Le Mans winner Nico Hulkenberg sixth place for Force India, his best result of the season so far.
It was the double-retirement of the McLaren pair that drew attention further down the order.
Having suffered a painful season with their new Honda power unit well off the pace and yet to show any reliability, both Alonso and Button surely reached their nadir in the foothills of the Alps.
The team had already been hit with a 50-place grid penalty before the race, 25 spots for each car, with time penalties also dished out.
All this with the new Honda chief executive attending his first Formula One race and with the manufacturer insisting they remain committed to a project they admit is tougher than they had imagined.