Two ahead at the start of the final round, Ariya’s lead was six shots by the time she birdied the long second and short sixth and she looked to be striding confidently to victory.
But she had to survive a great second half challenge from playing partner Lee Mirim before securing an emotional three-stroke victory.
The South Korean birdied three holes in a row from the tenth, and when Ariya had two nervy chips and double-bogeyed the 13th the advantage was down to one.
But the 20-year-old, who won three tournaments in a row on the LPGA Tour in May, showed her champion’s class, rolling in a 20-foot birdie putt at the 17th and then a solid par at the last earned the $450,000 (B15.6mn) first prize.
Lee three-putted the 18th for a bogey and a 73 left her having to share second place with 2014 champion, Mo Martin. The American had a closing 70.
“This is really important for me and for golf in Thailand,” said Ariya, whose next stop is the Olympic Games in Rio.
“The putt at the 17th was a huge relief. I had missed a few and I just wanted to make myself happy by holing it.”
Ariya was showered with water and champagne from her friends when she holed the final putt and the first hug was from her Mum, Narumon.
What did she say to her daughter? “I don’t know. She just cried,” said the new champion.
Lee, who started the championship with a course record 62 and led at halfway, put up a brave fight, the three birdies and then a miraculous par from tree at the 16th making for a dramatic finale.
Martin, one of the shortest hitters in the field, also piled on the pressure, and it was a great effort by the player who couldn’t defend the title at Turnberry last year due to injury.
“It was a tough year, but I’ve worked hard and this is the reward,” said the player who won at Royal Birkdale two years ago.
But it was Jutanugarn who had most to celebrate. One of the most powerful players on tour – she didn’t use her driver during the championship – she has the ability to become a dominant figure in the women’s game.
She first played in a LPGA event in her homeland as an 11-year-old – nine years later and she is now a household name and the country’s first major champion.
World No.1 Lydia Ko shot a final day 74 and the New Zealander, holder of two of the five majors, finished with a rather disappointing one under par total.
Ireland’s 21-year-old Leona Maguire shot a final round 75 for four under par and won the Smyth Salver for the top amateur.