Jade Jones claimed Britain's first Olympic taekwondo gold medal and the hosts' 25th of the London Games.
The 19-year-old beat Yuzhuo Hou 6-4 to take the women's -57kg title and avenge the Chinese fighter's sudden-death win at the 2011 World Championships.
After a nervous opening with few scoring opportunities, Jones took control of the final in the second round and powered to victory.
GB's previous best result was Sarah Stevenson's bronze in Beijing.
Jones told BBC Sport: "I still doesn't feel real, it feels crazy. I've dreamt about this for ages and the crowd have just been amazing. This can't be beaten.
"My coach is a legend and without him I wouldn't have been anywhere near where I was today. When I came out, I just wanted to go on and win.
"To be the first ever British taekwondo athlete to win Olympic gold is amazing. To win Olympic gold is special, but to perform in front of all my friends and family is just amazing."
The opening against Hou was tense, as each fighter tested their range during a scoreless first two minutes.
A low blow from the Chinese fighter accrued a second penalty which resulted in a point for Jones towards the end of the second round, while another shot to the body on the buzzer made it 2-0.
The Welsh teenager continued to go on the offensive and opened up a 5-1 lead heading into the final 30 seconds, closing out a stunning 6-4 victory.
Jones added: "I sang the national anthem and it was the best moment of my whole life. Amazing.
"I've seen this medal on pictures and seen other people get them. To finally have one round my neck, I still don't believe it. It's just crazy. Taekwondo is such a low-key sport that hopefully this will boost the profile.
"I will take a bit of time off first, get mentally sorted, then bring on Rio."
Team-mate Martin Stamper lost his semi-final against Turkey's world and European champion Servet Tazegul, 9-6 and lost out in the bronze medal match against Rohullah Nikpai of Afghanistan.