State Man, under jockey Paul Townend, went one better than last year when he finished second to Constitution Hill to give Mullins his fifth win in the race.
The seven-year-old was sent off an 8/13 favourite with Constitution Hill missing the Festival.
State Man made no mistake in his rival's absence, easing away from a plucky Irish Point to win by one and a half lengths at the end of the two-mile race.
"It is hard work out there," Townend told Racing TV.
"It is hard to pick up and go away and fly but he put it to bed very quickly. He is a star. I love riding him. It is so simple."
It was the first time Mullins had saddled the winner in the race since Annie Power's victory in 2016.
"He (Townend) is riding with such confidence and he was very confident in the horse," said Mullins.
"It just shows that when jockeys are riding in the zone they can make other things happen that they want to happen. Talking to him after, I can see what he's doing.
"There's no 'wow' factor with State Man, and you don't go 'wow' when you look at him either, but he does what it says on the tin. He's that type of horse."
Outsider Luccia ran on to finish a surprise third.
Mullins, the most successful trainer in Cheltenham history, had earlier got off the mark for the week in the Arkle Chase with Gaelic Warrior.
Odds-on favourite Lossiemouth made it a treble on the card for the 67-year-old by breezing past her rivals in the Mares' Hurdle.
Lossiemouth's win was Mullins' 97th at Cheltenham as he bids to become the first trainer to reach the century mark.
Townend was the rider for all three of Mullins' winners on Tuesday.
