Ian Thorpe beat Pieter van den Hoogenband as he broke the Olympic record to claim gold in a memorable 200m men's freestyle final.
Michael Phelps' bid to equal Mark Spitz's seven gold medals at a single Olympics ended as he finished third.
Phelps did reach the final of the men's 200m butterfly, but was beaten in his semi-final by Britain's Stephen Parry.
Great Britain also lead the three-day eventing after Pippa Funnell's fine ride and Ben Ainslie leads the sailing.
Thorpe produced a brilliant display to win one of the most-anticipated swimming races ever, a race which contained the four fastest men in history.
Van den Hoogenband is the only man other than Thorpe to ever go faster than the Australian's winning time of one minute 44.71 seconds.
There were three other swimming finals on Monday night, with the USA picking up another two gold medals.
Natalie Coughlin and Aaron Peirsol won the women's and men's 100m backstroke respectively, while China picked up their first swimming medal of 2004 as Luo Xuejuan won the 100m breaststroke.
After a rather disastrous Sunday, there was encouragement - if not any medals - for Great Britain on Monday.
A superb dressage routine from Funnell on Primmore's Pride helped Team GB take the overall lead after the second day of the three-day eventing.
William Fox-Pitt on Tamarillo also performed well, producing the sixth best individual display as Britain took a narrow lead over France and Germany.
And Ainslie capped a good day for the sailors by moving to the top of sailing's Finn class standings after winning race six.
His victory followed a fourth place in the day's first outing and he leads Spain's Rafael Trujillo - but he suffered a blow as his appeal against disqualification in race two was rejected.
Alongside Ainslie's heroics, Shirley Robertson did well to finish fourth in the day's opening race to maintain her overall lead.
Nathan Robertson and Gail Emms boosted hopes of a medal by qualifying for the last four of the badminton mixed doubles.
Britain's number four seeds saw off China's Qiqiu Chen and Tingting Zhao 15-8 17-15 and will now play Denmark's Jonas Rasmussen and Rikke Olsen.
And in boxing, Britain's Amir Khan impressively won his opening bout in the Olympic lightweight category against Marios Kaperonis and will now meet Bulgaria's Dimitar Stilianov.
Japan saw off the USA to take a brilliant gold in the men's team gymnastics, the first time the nation has won the team event since 1976.
The saga involving Greece's Kostas Kenteris and Katerina Thanou took a new twist as the pair face a criminal investigation into their missed drugs test and bike crash.
But there was delight too for the Greeks, as Nikolaos Sirandis and Thomas Bimis won the hosts' first gold medal of the Games in the men's 3m synchronised diving.
And there was more disappointing athletics news as the manager of Haile Gebrselassie admitted the runner could miss the Games with an Achilles injury.
China's fabulous Olympics continued - in the shooting, Zhu Qinan took the men's 10m air rifle title and set a new world record in the process, while Chen Yanqing claimed the women's 58kg weightlifting gold medal with an Olympic record total of 237.5 kg.
Yvonne Boenisch won Germany's first gold of the Games in the women's judo 57kg category, beating Kye Sun-Hui of North Korea in the final.