Lutalo Muhammad defeated British rival Damon Sansum before claiming World Taekwondo Grand Prix silver.
Only one GB fighter can be selected for the -80kg division at Rio 2016 and Muhammad enhanced his credentials with a 20-13 last eight win in Manchester.
He beat world number one Mahdi Khodabakhshi in the semi-finals before a 16-6 loss to Oussama Oueslati.
"There are positives from today, but I'm disappointed with the final," said Muhammad.
"Having missed the World Championships through injury it's great to be back at the top winning medals, although next time it has to be gold."
Muhammad's result means Great Britain finished the third edition of the Manchester World Taekwondo Grand Prix with three medals - following Jade Jones's -57kg victory and Bianca Walkden's +67kg silver on Saturday.
Rio Olympic battle intensifies
In order for GB to gain a place in the -80kg division for the Rio Olympics, Muhammad or Sansum must rank inside the top six on the world standings by the end of the initial qualification phase next month.
Prior to the event at the Manchester Regional Arena, Sansum was leading the battle between the pair in fifth, but Muhammad will now climb ahead of him.
However, the athlete selected for the British team will not be named until closer to the Games.
"I want to show everyone that I'm still the top athlete in GB," added Muhammad, who was controversially picked ahead of then world number one Aaron Cook for London 2012.
"I enjoy the rivalry [with Sansum]. Unlike other rivalries I've had, this is built on respect and the best man for the job will get the Olympic place."
Former British fighter Cook, who now represents Moldova and has already qualified for Rio, lost 23-14 to Sen Qiao of China in his opening contest.
Fellow Chinese fighter Wu Jingyu won the women's -49kg division, beating Thailand's Chanatip Sonkham 12-0 in the final.
Both Muhammad and Sansum will return for the season-ending World Taekwondo Grand Prix final in Mexico next month.