Hawaiian Tatiana Weston-Webb thought she had snatched the win with the last ride of the final but the six-time world champion held on take it out 14.17 to 13.94.
The victory gives Gilmore the world No.1 ranking after two events.
"Incredible. It really is such a special feeling to be out there ... it's a magical event," Gilmore said.
She is the first Australian winner of the women's title at Bells since 2012 and Gilmore most recently rang the iconic Bell trophy in 2010.
Weston-Webb needed a 6.80 when Gilmore gave up priority with less than a minute left in the decider.
It was an incredibly risky decision but also a calculated gamble which paid off.
Weston-Webb was clapping when she returned to the beach, thinking she might have done enough.
But the wave was not quite big enough and Weston-Webb's last score was a 6.57 in her first Bells Beach final.
"I thought it could have gone either way, I know I surfed my all and gave everything I could," Weston-Webb said.
Earlier on Thursday, Gilmore had a riveting semi-final against 16-year-old American rising star Caroline Marks.
Marks still had the lead with less than five minutes left but Gilmore unleashed a 9.07 wave score.
The American prodigy then had one last chance to regain the lead but wiped out.
Gilmore won 17.00 to 15.44.
