The 2019 World Championship silver medallist - the first woman to run the 400m hurdles in under 52 seconds at the US Olympic Trials last year - timed her race to perfection before storming down the home straight to beat team-mate and reigning world and defending Olympic champion Dalilah Muhammad with a sensational time of 51.46 seconds.
Muhammad had to settle for silver behind her rival despite a hugely impressive personal best (51.58) that was inside the previous world record, with Femke Bol of the Netherlands taking bronze with a massive PB of her own (52.03).
"I'm absolutely delighted. What a great race. I'm just grateful to be out here celebrating that extraordinary race and representing my country," said McLaughlin.
"I saw Dalilah ahead of me with one to go. I just thought, 'Run your race'.
"The race doesn't really start until hurdle seven. I just wanted to go out there and give it everything I had.
"I can't really (get) it straight in my head yet. I'm sure I'll process it and celebrate later.”
The 400m hurdles finals have provided two of the most memorable athletics races at the Tokyo Games so far.
On Tuesday, double world champion Karsten Warholm of Norway obliterated his own world record to beat Rai Benjamin in the men’s final in an incredible time of 45.94.