Racing out of lane six, he quickly surged to the lead and led by a full body length halfway through the second of four laps. Phelps was nearly two seconds ahead of the field when he touched in 1 minute, 42.96 seconds, breaking the mark of 1:43.86 he set at last year's world championships.
"That's great," said Phelps, who was much more reserved in his celebration after a wild performance on deck the previous day. "I just wanted to be out at the 50-meter point, and that's where I was. I was in open water, and it was difficult for the other guys to see me."
South Korea's Park Tae-hwan took the silver in 1:44.85, touching while Phelps was already looking at the scoreboard. Peter Vanderkaay, one of Phelps' training partners, gave the U.S. another medal by claiming the bronze in 1:45.14.
"I knew Park is strong in the last 50 meters," Phelps said of the 400 free gold medalist, "so I knew I had to be fast and concentrated."
Everyone else knew they were racing for second. "Phelps swam so fast," Park said. "It is my honor to compete with him."
Added Vanderkaay, "I just tried to swim my own race. He's going to go out, but I can't let that affect my race strategy."
Phelps is now 3-for-3 in Beijing, on course to beat Spitz's 36-year-old record of seven golds in a single Olympics. He opened with a world record in the 400 individual medley, then led off an epic victory in the 400 free relay.
Along the way, he'll take care of some other historical landmarks.
Phelps's ninth career gold tied him with Spitz, Lewis, Soviet gymnast Larysa Latynina and Finnish runner Paavo Nurmi for the most in Olympic history.
The mark isn't likely to be shared for long. Phelps will go for his fourth medal of these games and 10th overall on Wednesday in the 200 butterfly, yet another event in which he holds the world record.
It turned out to be a red, white and blue morning for the American swimmers.
Aaron Peirsol defended his Olympic title in the 100 backstroke with a world record of 52.54, and teammate Matt Grevers made it a 1-2 U.S. finish. Peirsol beat his own mark, 52.89, set at last month's national trials in Omaha, Neb., while Grevers added to the gold he won for swimming the preliminaries of the 400 free relay.
The bronze was shared by Russia's Arkady Vyatchanin and Australia's Hayden Stoeckle.
Natalie Coughlin became the first woman to repeat as champion of the 100 backstroke, winning with an American record of 58.96. She held off Kirsty Coventry of Zimbabwe, who set a world record of 58.77 in the semifinals but couldn't repeat that performance.
"It hasn't really sunk in yet," Coughlin said. "I knew when I saw the '1' by my name, because at first I thought I saw the clock wrong. It's a great feeling."
Another American, Margaret Hoelzer, took bronze in 58.34.
The U.S. dominance was broken only by Australia's Leisel Jones, who made up for a disappointing bronze four years ago by winning the 100 breaststroke in 1:05.17, just eight-hundredths off her own world record. Rebecca Soni, who only got in the event after fellow American Jessica Hardy tested positive for drugs last month, sure took advantage of her opportunity by winning the silver in 1:06.73. Mirna Jukic of Austria got the bronze (1:07.34).
In the semifinals of the women's 200 free, Katie Hoff advanced with the second-fastest time of 1:57.01. The 19-year-old American, who's like a little sister to Phelps, is still trying to win her first gold medal after settling for bronze and silver in her first two events. She still has three more individual races, plus a relay, to make up for that void.
Slovenia's Sara Isakovic was the top qualifier at 1:56.50.
