Defending champion Dalilah Muhammad took silver for Team USA
McLaughlin, 21, edged out American rival and defending champion Dalilah Muhammad in the fastest time ever run in the event.
The New Jersey-born star, who became the youngest ever winner of the event, trailed Muhammad around the race’s final bend before powering past her to victory.
McLaughlin caught her American teammate to finish in 51.46, while Muhammad also broke the old world record to cross the line in 51.58.
Femke Bol of the Netherlands won bronze in 52.03, setting a new European record in a time that would have broken the previous Olympic record.
Muhammad, 31, is from Queens, New York, and is the 2016 gold medalist and the reigning world champion.
She had recovered from Covid-19 and hamstring issues in the run-up to the games.
McLaughlin was a dominant high school athlete and spent one year at the University of Kentucky before turning professional and signing sponsorship deals with New Balance, Gatorade and watchmaker TAG Heuer.
The previous three races that featured the American athletes had seen the world record broken.
McLaughlin became the first woman in history to go under 52 seconds when she set the old world record of 51.90 at the US Olympic trials in June.
“I was just trusting the process and giving the glory to God,” she said after the race when asked about her late kick that won her gold.
“This was an awesome opportunity to represent everyone back home.”
There were also wild scenes of celebration at a watch party at her old high school in New Jersey.
Muhammad told NBC that she was “so thankful to win a silver medal for the USA.”
The state of New Jersey’s official Twitter account celebrated the win.
“JERSEY GIRL, GOLD MEDAL WINNER, WORLD RECORD HOLDER,” the account tweeted after the win.
NFL star Aaron Rodgers took to Twitter to show his appreciation for the win.
"(Sydney McLaughlin) is incredible. Wow," a-t-il tweeté.