Odermatt, who has yet to win a downhill on the World Cup circuit - having notched up seven second places, laid down a near-perfect run on L'Eclipse piste to clock a winning time of one minute and 47.05 seconds.
Norway's Aleksander Aamodt Kilde won his second silver of the championships, at 0.48 seconds, after his second place in Thursday's super-G. Unheralded Canadian Cameron Alexander claimed bronze (+0.89).
"It was for me the perfect run, maybe the best downhill I have ever shown," said Odermatt, the runaway leader in the World Cup overall standings thanks to his domination of the super G and strength in the giant slalom.
"We did another great battle, I guess. But just one can win. He (Kilde) would deserve the gold medal as well, but today it was on my side.
"I felt it was a perfect run, when you look and you know some fast skiers had already been down, I knew it was good."
Hitting speeds of 125 kmh (78 mph) and negotiating jumps up to 50 metres long, Odermatt was in control after the initial gliding section, aggressively holding his line in an exemplary display of speed skiing in bright, sunny conditions.
Kilde was always going to be Odermatt's main threat, the Norwegian having won five of the eight men's World Cup downhill races this season.
As he streaked through the finish line, the big screen showing him with a time slower than Odermatt, the Swiss jumped out of the 'leader's chair' in exultation, hugging a teammate in delight and punching the air.
'Hard nut to crack'
"I tried my best, but being one of the favourites, you have a lot of pressure," said Kilde.
"Also, I knew that Odermatt had delivered something really, really good. So I tried to charge as hard as I could. I messed up a couple of turns and that cost me.
"But it’s still quite incredible, and the way I feel now is super. I really tested myself. For sure Marco and I will battle for the rest of the season and I will keep trying to beat him.
"He is a hard nut to crack. In downhill, I’ve been in front of him until today, but that is all a part of it."
A Canadian on the podium was not unexpected but it was a surprise it was Alexander rather than James Crawford, who had won the super-G gold.
Alexander, with his sole World Cup podium a downhill victory in Kvitfjell in March last year, held on to third from Austria's combined silver medallist Marco Schwarz (+0.93), with Crawford finishing fifth (+1.01).
There was a reminder of the risks of downhill skiing as Alexander and Crawford's Canadian teammate Brodie Seger crashed out and was evacuated by helicopter.
Reigning world champion Vincent Kriechmayr, winner of the three World Cup downhill races this season and winner of the downhill on the same slope at last season's World Cup Finals, fluffed his lines, finishing 11th, 1.16 seconds off Odermatt's pace.
Johan Clarey, the elder statesman of alpine skiing who is still managing to pull out podium performances at the age of 42, finished even further adrift, at 1.89 seconds.
"I wasn't there today. I knew it'd be tough," said the Olympic silver medallist, who claimed a second place in the famed Kitzbuhel downhill last month.
"At 42, I've found it tough to manage my fatigue, mixed in with all the emotions of racing on home snow."
Clarey was full of praise for Odermatt, comparing his athleticism to fellow Swiss and tennis great Roger Federer.
"He's the Federer of skiing. He's able to do things others cannot," he said.
"There have been real beasts in skiing, but he's a genius.
"This piste is made for someone like him, it's turn on turn, demanding commitment, lots of crazy skiing and talent."
