Phelps finished in an Olympic-record time of 1 minute, 57.14 seconds, lowering his own mark of 1:58.52 set in the semifinals one night earlier.
Ryan Lochte of Daytona Beach, Fla., earned silver in 1:58.78. George Bovell of Trinidad took bronze in 1:58.80.
Phelps, the world record-holder and current world champion, earned his third individual gold medal in Athens. Mark Spitz is the only other swimmer to win more than two in a single Olympics. Spitz won four — and Phelps still has one individual event remaining, the 100-meter butterfly on Friday.
The 19-year-old from Baltimore was unsuccessful in his bid to break Spitz's record of seven golds in the 1972 Munich Games, but still could end up with eight medals.
He also has two bronze medals, giving him the largest personal haul so far of any athlete in Athens. His other golds were in the 200 butterfly, 400 individual medley and 800 freestyle relay.
Russian gymnast Aleksandr Dityatin is the only person to win eight medals at a single Olympics, earning three gold, four silver and one bronze in the boycotted 1980 Moscow Games. Eight athletes have won seven, including Spitz and U.S. swimmer Matt Biondi in 1988