Dunlop was on course to match the all-time TT wins tally of 26 set by his late uncle Joey Dunlop having won his 25th race on Wednesday in the Supersport class.
A dominant winner in the Supertwin race on Tuesday, Dunlop was all but assured a second victory on Friday.
But his Paton broke down over the mountain section, leaving Mike Browne to take a comfortable lead and stare down his maiden TT victory.
However, Browne was a retirement on lap two due to a clutch issue, gifting Hickman a shock second win of the day and first for the Yamaha R7 in the class.
Hickman only completed his first lap on the Yamaha Supertwin on Tuesday morning having had all sorts of mechanical issues throughout practice.
Having smashed the outright lap record in the earlier Superstock race at 136.358mph for his 11th TT win, Hickman’s haul now stands at 12 with a second career Supertwin victory.
Dunlop was only a second clear of Browne through Glen Helen on the opening lap, but was 3.3s ahead through Ballaugh and five seconds up the road at Ramsey.
Source: Autosport