The 18-year-old, in pole position after the first run, clocked a combined total of 1 minute 44.54 seconds over two runs to finish 0.53 seconds ahead of Austria’s Marlies Schild, whose silver meant she now has four Olympic medals from three different editions of the Games.
Schild’s compatriot Katrin Zettel, claimed bronze at 0.81 seconds, denying defending champion Maria Höfl-Riesch a podium finish in what was her Olympic swansong. The German had to settle for fourth.
“This has been a dream of mine for a very long time,” said Shiffrin, who at the age of 18 years and 345 days became the youngest ever Olympic slalom champion.
“I'm so happy to be in this position,” she added. “And I couldn't be happier than to be on the podium with Marlies and Kathrin.”
It was a quite remarkable performance from Shiffrin, who won the world slalom title in Schladming last year at the age of just 17, but who was left deeply disappointed after finishing fifth in the giant slalom in Sochi.
With the top 30 racers from the first run starting the second in reverse order, Shiffrin went off in 30th to ensure a grandstand finish to the battle for gold.
After watching Höfl-Riesch and third-placed Slovenian Tina Maze lose valuable time in a tight middle section on their second runs, Shiffrin battled down what was by now a well rutted piste in fearless style.
A slight error saw the American briefly go down on the icy snow, but she had such a strong cushion on second-placed Schild, that her lead remained at 0.59 seconds by the second split.
“It was a crazy moment," Shiffrin said of her near-fall. "I was going very fast and I thought I was not going to make it, it scared me.”
Not that it showed. The teenager simply gritted her teeth and came up with a smooth bottom section to nail a fully deserved gold.
Silver lining for Schild
At the other end of the age spectrum, second place represented a fantastic result for 32-year-old Schild, who had torn knee ligaments during Shiffrin's first ever World Cup slalom victory back in December 2012, and has had to since battle her way back to the top.
Her silver means Schild is the first female skier to win an Olympic slalom medal at three successive Games, having also won bronze at Turin 2006 and silver in Vancouver four years later.
“I'm pleased to take a medal. I now have four medals in my career, of course not the gold, but I've won so many races,” said the Austrian veteran.
“I'm world champion, I have four Olympic medals… you can't really complain,” she added.
Schild was also quick to hail the performance of Shiffrin, 14 years her junior: “You have to say that Mikaela is a sensational skier and she's very quick."
However, there was no fairytale ending for the 29-year old Höfl-Riesch, who brought the curtain down on a relatively short but incredible Olympic career, which had started with double gold at Vancouver 2010 (in the slalom and combined) and finished just the same way in Rosa Khutor (with golds in the super combined and super-G)
"No matter what happens, I had a great Olympic career, I think," reflected Höfl-Riesch.