The 23-year-old, whose favourite discipline is the shorter speed event, the super-G, clocked 2min 06.23sec down the 3.5km-long course to give Austria their first downhill gold since Fritz Stroebl at Salt Lake City 2002.
Mayer, who had never previously won a major international downhill, also bettered his father Helmut's silver-medal showing in the super-G at Calgary 1998.
"Of course it means a lot to me," said an emotional Mayer. “It's really difficult to go down the track without mistakes.
"I thought maybe in a few years I could dream of this sort of achievement. It was really cool and my family will be excited,” he added.
"I woke up this morning and I knew that I could win this race. I was smiling the whole day, all throughout the inspection. It was my day."
In a gripping morning of racing, the lead changed hands five times until Mayer, wearing bib number 11, came bombing down the slope. Italy’s Christof Innerhofer took silver just six hundredths of a second off the pace.
“It has been a big dream for me to win a medal at the Olympic Games, so I can't really believe it,” admitted a stunned Innerhofer. “I couldn't be happier.”
Norway's Kjetil Jansrud claimed bronze a further 0.04 seconds adrift, with team-mate and world downhill champion Aksel Lund Svindal in fourth, while another strong favourite, Bode Miller of the USA could only finish eighth. Defending Olympic champion Didier Defago of Switzerland finished 14th at 1.56sec.
Defeating his idols
Mayer, who earlier this week had named Svindal and Miller as his “idols and role models”, skied a run that either man would have been proud of.
Down on two splits in the upper section of the course, which was smooth and icy in overcast conditions, Mayer nailed the tricky technical middle part which demands slick rhythmic turns to maintain speed before a gliding section favoured by the heavier racers.
Mastering the three jumps which catapult the racers 60 metres while travelling at speeds of around 135kph, Mayer held his line through to the end, in front of a vociferous crowd packed into the purpose-built stands.
Innerhofer took advantage of his superior size and his liking for icy tracks to secure a 0.58sec lead early on, but he could not maintain it.
“I risked so much at the top,” acknowledged Innerhofer. “I thought to myself, 'Come on Chris, you must push harder', so I pushed harder. I thought that if I risked a lot it could go well and it could go badly, but at least I could say after the race that I tried.”
For Svindal and Miller, who each claimed a gold, silver and bronze at the Vancouver Games in 2010, there was disappointment.
“I feel disappointed. I skied hard and well, and that's the most important thing. It just didn't go all right,” said Miller, who is racing in his record fifth Olympic Winter Games.
“It's tough, obviously I was looking to win and I thought I had a good chance of it. I was well prepared so it's tough when you don't get things to go your way,” he reflected.
“I wanted to ski the course as hard as I could and not really back off, but it requires a lot of tactics today which I didn't apply.”
Svindal was equally disappointed, but philosophical, at missing out on a podium place by just 0.19sec. “It’s pretty much the worst place to be. I've been there before and probably will be again,” the 31-year-old said.
“If you want to fight for medals, you have to be prepared to lose out on them. I made a few small mistakes. It was hard to stay balanced, I was pushed around a little too much and I lost my line.”