Rudisha, the world champion and world record holder, stormed to victory with a devastating final-lap sprint that cemented his place among the greats such as New Zealand's Peter Snell, the last man to successfully defend an 800m Olympic gold.
Nicknamed 'King David' in Kenya, Rudisha hit top gear in the final 300 metres to surge ahead of his rivals with his trademark finishing kick and win gold in a season's best time of one minute 42.15 seconds.
"I am so excited. It is the greatest moment of my career," Rudisha told reporters.
After winning his first Olympic gold and setting a world record at the 2012 London Games, Rudisha suffered a couple of injury-ravaged years that dented his confidence and caused him to miss the 2013 world championships.
He struggled for much of the current season and came third in national Olympic trials but the 6-foot-3-inch Maasai runner looked in total control of the Rio Games final as his long stride and fluid running style propelled him to victory.
"It's been very difficult," Rudisha said, referring to his injuries. "I have stayed focused and positive. My coach has been great and given me hope."
The 27-year-old crossed the line several metres ahead of Algeria's Taoufik Makhloufi, the London Games gold medal winner over 1,500m.
Makhloufi said the silver medal boosted his confidence ahead of the 1,500m event later this week.
"I am so happy to make my country proud," he said. "I dedicate this to the poor people."
Fast-finishing American Clayton Murphy set a personal best time to take bronze ahead of France's Pierre-Ambroise Bosse.
"When I saw I could get bronze, I just kept pushing," said Murphy, who was delighted to have raced against Rudisha.
"He is somebody I've looked up to since he broke the world record. It was an honour to race him."
(Editing by Ed Osmond/Patrick Johnston)
