Magical inflicted a first defeat on Ghaiyyath in 2020 by winning the Irish Champion Stakes for the second straight year.
Ghaiyyath went out as the 8-13 favourite and led from the start at Leopardstown, but the Aidan O'Brien-trained Magical kept in touch.
Seamie Heffernan edged Magical in front in the closing strides to take a three-quarter-length win at 9-2.
Armoury, a 66-1 shot, was well back in third place.
Ghaiyyath, trained by Charlie Appleby, started as the odds-on favourite after four front-running victories this year.
William Buick had Ghaiyyath quickly in front but he failed to open up a gap and was outstayed by the impressive Magical.
"It was unbelievable that. She's a great mare - we just felt she needed to sit close to him (Ghaiyyath) to keep her interested as she gets a little bit lazy when she sits back," O'Brien told RTE Sport.
"It was very straightforward. William went a good gallop (on Ghaiyyath) but she was happy to go with him the whole way and make her own running.
"And when William decided it was time to go, she was happy to go with him. Seamie gave her a brilliant ride and I'm absolutely delighted."