The German rider from Lotto Belisol coasted to a fine bunch sprint win ahead of Italian Alessandro Petacchi (Lampre) and Dutchman Tom Veelers (Argos-Shimano) at the conclusion of the 214.5km stage in Normandy.
It was Greipel's second career win on the Tour – and the 29-year-old from Rostock becomes the first German to win in consecutive Tours since Erik Zabel in 2001/02.
Greipel had the perfect lead-out for the final sprint, with three Lotto Belisol team-mates sheltering him through the chaos before New Zealander Greg Henderson teed him up inside the closing 200m.
"I'm so happy today. My guys supported me really well. I’m so happy to have such strong riders to lead me out. We wanted to win a stage and now we have done it," Greipel said before mounting the podium.
Italian veteran Petacchi took a solid second place ahead of the impressive Veelers, while Australian Matt Goss (Orica-GreenEdge) pipped green jersey and double stage winner Peter Sagan (Liquigas) for fourth.
A massive high-speed accident just inside the final 3km brought down a large amount of riders - including stage two winner Cavendish and his Sky team-mate Bernard Eisel.
Both Sky riders crossed the line bloodied and bruised five minutes after Greipel took the win.
"It looked pretty serious but he's okay," said Team Sky directeur sportif Sean Yates when asked about Cavendish. "He's cut up and bruised but should be okay."
Yates denied that a lack of lead-out train is leaving the world champion isolated in the Tour. "He may not have done down if he was surrounded by team-mates but every sprint is always dangerous and today he was just unlucky," he said.
Switzerland's Fabian Cancellara (RadioShack) finished safely in the peloton to conserve his yellow jersey. He leads Britain’s Bradley Wiggins (Team Sky) and Frenchman Sylvain Chavanel (Omega Pharma-Quick Step) by seven seconds in the overall standings.
Under bright sun and blue skies in northern France, a group of three riders formed on the road moments after the start at Abbeville following an initial attack by Europcar's Yukiya Arashiro.
The Japanese rider was joined by veteran David Moncoutie (Cofidis) and youngster Anthony Delaplace (Saur-Sojasun) and the trio quickly built up a lead of almost eight minutes over the coast-hugging roads.
Four minor climbs provided slight diversions in a largely flat stage which was saved from the notorious winds that often batter the Normandy coastline.
Both Frenchmen, Moncoutie and Delaplace, picked up two points in the king of the mountains competition – but it was not enough to worry Dane Michael Morkov (Saxo Bank-Tinkoff Bank) who retained his polka dot jersey.
The intermediate sprint at Fecamp, 75km from the finish, saw Cavendish beat his green jersey rivals for fourth place, around six minutes after Arashiro had taken the leading trio over the line.
But Cavendish's luck would turn by the time the peloton arrived in Rouen a couple of hours later.
A nervous finish had seen a foiled counter-attack take place inside the final 10km, with Chavanel trying to break clear alongside Philippe Gilbert (BMC) and Wout Poels (Vacansoleil-DCM) as the initial three-man break was caught.
The race came back together on the outskirts of Rouen and with the pace cranked up, a touch of wheels on the left-hand side of the road brought about a large pile-up.
South Africa’s Robbie Hunter (Garmin-Sharp) was one of the main victims in the crash which brought down both Cavendish and Eisel. Also involved were sprinters Mark Renshaw (Rabobank) and Yauheni Hutarovic (FDJ-BigMat).
With his main sprint rival out of the picture, Greipel was able to take a relatively straightforward win and move up to third in the green jersey standings.
Slovak youngster Sagan leads the race for green with 147 points, with Goss in second on 92 and Greipel on 87.
The Tour continues on Thursday with a flat 196.5km stage from Rouen to St Quentin which will provide Cavendish with an ideal opportunity to get back to winning ways – provided he can avoid hitting the tarmac.