Magic's 2.28m listenership was up 14% quarter-on-quarter, delivering a dominating 6.1% share of the London audience, according to the latest RAJAR data for the three months to June 26.
Capital, which had briefly returned to the top in the first quarter of 2011, slipped into second place with a reach of 2.08m, down 4.7% quarter-on-quarter. Heart took third spot with a reach of 1.99m, down 5.6% on the previous quarter.
Capital also fell to third place in London in terms of market share, with 4.8%, behind fellow Global Radio station Heart, which had 5.1%. Dance station Kiss, also owned by Bauer Media, retained fourth place in the capital with a weekly reach of 1.86m and a 4.3% share of all listening.
Steve Parkinson, the managing director of Bauer Radio London, said: "Our London team is rightly celebrating today's figures - with both Magic and Kiss enjoying their highest audiences ever. Quite an achievement.
"Magic is playing the BBC at their own game by using other Bauer platforms such as magazines and TV to promote our service, and Kiss continues to connect with millions of young consumers across radio, and via a huge increase in app downloads and online listening."
Dee Ford, group managing director radio, Bauer Media, added: "I am pleased to see Magic 105.4 return to number one spot in London, with the largest reach of all music stations, including the BBC. Commercial radio as a whole is performing very well and listening hours are up across the board."
Capital's Johnny Vaughan and Lisa Snowdon had the most popular commercial breakfast show in London, with an audience of 1.14m, ahead of Magic's Neil Fox with 845.000.
Heart's breakfast show, presented by Jamie Theakston and Harriet Scott, climbed to third place with an audience of 792,000, just ahead of Kiss's Rickie, Melvin and Charlie, with 789,000.
At BBC London 94.9, Vanessa Feltz's early breakfast show was up 100% year-on-year to 275,000. The station, which welcomed back Danny Baker in April after his battle with cancer, had an average weekly reach of 554,000, up 9% year on year.
Elsewhere, the main Absolute Radio station had an average weekly reach of 1.65m in the second quarter, with an audience share of 1.3%. Digital spinoff station Absolute 80s grew its audience to 894,000, while Absolute Radio 90s also climbed to 432,000.
Bauer Media's The Hits remained the most popular digital station with 1.22m, while fellow digital station Planet Rock added 20,000 weekly listeners to reach an all-time high of 857,000. Classic FM was again the most popular commercial station, with 5.74m listeners and a 3.6% audience share.