The 32-year-old Frenchman, who is looking for his third RoC victory, was at an advantage from the start as both drivers were using Citroen Xsaras similar to the one that Loeb used to win this year's world championship.
But that should not take away from the smooth performance that saw him beat the American easily.
Loeb, who has not competed for three months due to a broken arm, said: "At the moment I've won all my races. It's nice to come back after three months to beat my rival from the year Marcus."
Race of Champions 2006
Ekstrom wins Race of Champions
16/12/2006 AT 19:47
In the second all-rally tie, Loeb's Citroen team-mate Dani Sordo was in action against Colin McRae, but the Scotsman proved experience is everything as he dumped the Spaniard out of the tournament.
The best of the quarter-final ties though was the all-French affair between Sebastien Bourdais and Yvan Muller in Renault Meganes, as the pair swapped places on a number of occasions.
Bourdais just put the power down well-enough exiting the final corner to hold on and edge things by just 0.171 seconds.
"That was close,2 said the triple ChampCar champion. "I honestly thought he was going to pass me, so I didn't shift gear or anything. A great fight."
The final tie saw a shock result as DTM star Mattias Ekstrom beat Renault Formula One driver Heikki Kovalainen by just 0.002 seconds - the closest finish of the night.
Round one - big names crash out
The opening round saw a number of high-profile casualties, including Formula One star David Coulthard - who was beaten by Muller, and double World Touring Car champion Andy Priaulx.
The latter was particularly disappointed to lose out to Bourdais after a moment of confusion caused him to slow down mysteriously.
Priaulx said: "I saw a chequered flag so I slowed down, but it was someone in the crowd who was waving it. Just a bad mistake really."
Also sent home early from the race section were DTM champion Bernd Schneider (beaten by Ekstrom) and Le Mans legend Tom Kristensen, who was beaten by just 0.129 seconds by Kovalainen in Aston Martins.
There were no surprises in the rally section as 'Nani Roma' lost out to Loeb in the Porsches while another Dakar two-wheeled convert Stephane Peterhansel spun twice as he trailed home Nations' Cup star Pastrana.
Another spinner was German Armin Schwarz, who was beaten by Sordo, while the final bout saw 2002 winner Marcus Gronholm lose out to McRae after the Scotsman won the all-Porsche tie with a superb start.
Race of Champions 2006
Finland win RoC Nations' Cup
16/12/2006 AT 16:33
Race of Champions 2006
Pastrana stars as USA make Nations' Cup semis
16/12/2006 AT 15:04