The 2010 champion won the stage in his SMG Buggy by more than six minutes from 11-time Dakar champion Stephane Peterhansel with 2011 winner, Qatar's Nasser Al-Attiyah, finishing third.
"At the beginning we had to drive in the dust, but little by little we managed to overtake several cars," said Sainz who now leads the race by 2min 06seconds from overnight leader Nani Roma (Mini)
"We also got a bit lucky when, about 10 km before the finish, our power steering broke down in a narrow spot amid all the vegetation, but we easily made it to the finish all the same."
Despite his second place finish, Peterhansel was still frustrated after more problems with punctures threatened to ruin his race.
"Things didn't start very well this morning. We had a flat tyre after 30 km. Not the best way to start the day," said the Frenchman.
"So we decided to set a consistent pace to try and avoid making mistakes. Towards the end, there was a waypoint that was quite hard to find, but we went the right way from the beginning by U-turning to look in the right direction, which helped us not to lose too much time. And, in the end, we did quite well."
Peterhansel suffered six punctures on stage three and is 18min 10sec behind Sainz.
Stage 4 result
1 Carlos Sainz (ESP) 5:20:32
2 Stéphane Peterhansel (FRA) 5:26:36 +06:04
3 Nasser Al-Attiyah (QAT) 5:29:30 +08:58
4 Federico Villagra (ARG) 5:33:51 +13:19
5 Nani Roma (ESP) 5:34:40 +14:08
6 Orlando Terranova (ARG) 5:36:36 +16:04
7 Giniel de Villiers (RSA) 5:45:21 +24:49
8 Christian Lavieille (FRA) 5:47:31 +26:59
9 Pascal Thomasse (FRA) 5:54:09 +33:37
10 Aidyn Rakhimbayev (KAZ) 5:54:40 +34:08
1 Carlos Sainz 14:52:47
2 Nani Roma + 2:06
3 Nasser Al-Attiyah + 6:56
4 Orlando Terranova + 13:08
5 Stéphane Peterhansel + 18:10
6 Giniel de Villiers + 39:10
7 Christian Lavieille + 46:20
8 Federico Villagra + 47:12
9 Krzystof Holowczyc + 1:07:00
10 Marek Dabrowski + 1:18:44