Rosberg took second place ahead of Sebastian Vettel, while Hamilton was forced to retire from the race with problems in his rear brakes, a disastrous result for his world title hopes. Ricciardo's victory marked the first time this season Mercedes didn't take the top spot at the end of a race.
Hamilton had the quickest start and nearly overtook his teammate in the very first corner, but Rosberg held his position on the inside and forced the Englishman off the track, losing his second spot to Sebastian Vettel.
The safety car had to come out immediately, as the two Marussia cars collided in the fourth corner, forcing both drivers to end their Grand Prix prematurely.
Stuck behind Vettel's slower Red Bull for a handful of laps, Hamilton lost precious seconds on his teammate Rosberg, but after overtaking the defending World Champion in Lap 11, the comeback was on.
Hamilton came to within a second of his teammate before both were forced to make their first pit stop, with the bulk of the drivers now making the switch from super soft to soft tires.
Fighting for the lead, Rosberg locked up and was forced to cut the chicane as he had his teammate next to him, but race officials found no issues with his move, claiming the German didn't gain an advantage. Blogging for the BBC, David Coulthard disagreed:
It's a simple question the stewards have to answer: has he gained an advantage? He hasn't gained a position, but he has gained some time.
The lap he (Rosberg) missed the chicane was his fastest, so it's quite clear he did gain a time advantage. But the stewards have spoken and Lewis will have to do it on the track.
The race seemed like it would be yet another battle of the Mercedes cars, but in Lap 38, both drivers reported issues with power on the team radio. Hamilton and Rosberg were suddenly lapping three seconds slower than before, and the rest of the pack started to gain.
Engineers frantically started to look for solutions with both drivers confused over what was going on, but after 10 minutes of crunching data, the message for the Mercedes duo was simple—no one knew what was wrong, and they couldn't fix it during the race.
Six laps later, Hamilton hit his brakes very late battling Rosberg in the chicane, and smoke was visible on the right side of the car. While it initially looked like a puncture, Hamilton reported he had lost power in his brakes, and the Englishman was forced to retire.
Rosberg still held the lead, but Fernando Alonso and Felipe Massa were gaining on the German by more than a second. Force India's Sergio Perez's was the main driver closest to Rosberg, but employing a one-stop tactic, his lap times were slightly slower than those of the Red Bulls and Alonso, giving hope to Rosberg.
The superior power of the Williams and Force India cars was evident, and on Canada's long straits, such an advantage is a powerful one. Massa's march on the top four had Vettel and Ricciardo defending their lead rather than attacking Perez, with Rosberg still in front.
Perez lost braking power with four laps left and Ricciardo took advantage to move into second, while Rosberg was once again lapping under 1:20:00, holding a 1.2-second advantage over the young Australian.
Ricciardo opened up his assault in Lap 68 and took the lead on his very first try, just the second non-Mercedes driver all year to find himself at the front of the race.
Vettel passed Perez in the final lap and Massa tried to take advantage of the Mexican's lack of braking power, but contact sent both cars into the wall in a horrific crash, putting both Red Bull drivers on the podium.