Unbeaten Frankel capped a brilliant career as he overcame testing conditions to claim his 14th consecutive victory in the Champion Stakes.
The world's top-rated racehorse, trained by Sir Henry Cecil, beat Cirrus Des Aigles by a length-and-three-quarters in his final race before being retired to stud.
The four-year-old colt lost ground at the start and was slowly out of the stalls under Tom Queally.
In the softest ground he has encountered, the 2-11 favourite - considered one of the all-time greats - recovered and had enough to see off last year's winner (9-2).
He was cheered continuously from three furlongs out by the sell-out 32,000 crowd.
Victory for Frankel took his career prize money to nearly £3m and his aggregate winning distance to more than 76 lengths.
Owner Prince Khalid Abdullah confirmed in the winners' enclosure after the race that Frankel will be retired.
He is set to command a fee of £100,000 a time at stud, leading to a £100m valuation.
"He's the best I've ever had, the best I've ever seen," said Cecil, who is battling stomach cancer.
"I'd be very surprised if there's ever been anything better."
Frankel's participation in the mile-and-a-quarter race had been placed in some doubt overnight after prolonged rain turned the going to soft, heavy in places.
But he delighted his followers by showing he could perform in all conditions to take the £1.3m highlight of British Champions Day, the country's richest racing day.
Queally said: "No doubt he is better on better ground but his class showed today. I walked the track and was worried about conditions, but after walking the home straight I knew it was not too heavy for him to quicken up and go about his business and win.
"You never see an F1 car win on anything but tarmac but for him to win on ground like that shows how special he is.
"There was a bigger crowd at Royal Ascot but this was more intense. I don't know what I would have done if he didn't win."
Teddy Grimthorpe, Abdullah's racing manager, said: "He's wonderful. The crowd's reaction is great - the greatest for the greatest.
"Frankel has brought a whole new generation of people to the sport. He's brought a wider public recognition of the sport and he's given them something to savour.
"He's the ultimate equine athlete. We've never seen anything like him.
"Prince Khalid said to me he has run his last race and I think that is the correct decision - he has given us three sensational years."
This was only Frankel's second race over 10 furlongs, having stepped up from a mile for the first time at York in August.
His previous 12 victories before that had come over seven furlongs and a mile, and included the 2000 Guineas classic at Newmarket in 2011.
A horse Frankel had left trailing into a place five times before illustrated the champion's supremacy when winning the Queen Elizabeth II Stakes.
Excelebration, trained by Aidan O'Brien, justified odds of 10-11 to beat Cityscape by three lengths. Elusive Kate was third, with the Queen's horse Carlton House fourth.
It was a fourth win in the opening four races for Irish-trained runners with Dermot Weld completing a fine double through 2010 Ascot Gold Cup winner Rite of Passage and Sapphire.
Rite Of Passage, ridden by Pat Smullen, returned from 510 days off to win the Long Distance Cup as the 8-1 shot came from behind to collar his rivals in the opening two-mile contest.
Weld and Smullen teamed up again as 5-2 joint favourite Sapphire relished the mud to land the fillies and mares' stakes.
Meanwhile, Maarek (5-1) under Jamie Spencer claimed the six-furlong sprint for trainer David Nagle.