Vlhova trailed Germany's Viktoria Rebensburg after the first run but clawed back time on the second despite being buffeted by strong winds that made life difficult for all the racers.
Rebensburg, the last skier down, appeared to have victory in the bag as she stayed ahead on the split times, but her advantage leaked away and Vlhova won by 0.14 seconds.
Olympic champion Shiffrin, fourth after the first run when she appeared to be skiing within herself, moved up into third spot with a smooth second run, 0.38 seconds back.
Slalom expert Vlhova, 23, added gold to the silver she won in the combined and becomes the first Slovakian skier ever to win a gold medal at the world championships.
The race was hampered by soft snow conditions and strong gusts of wind but Vlhova, skiing on the absolute limit, powered through the gates in thrilling fashion to claim victory.
She will go head-to-head again with American Shiffrin in the women's slalom at the weekend when both will be aiming for their second gold of the championships after Shiffrin won the Super-G title last week.
American four-times word champion Bode Miller, analysing for Eurosport, expects that to be a showdown battle as Shiffrin chases a fourth successive slalom world title.
"Vlhova came into this event knowing what she had to do to beat Mikaela -- she has to ski hard, ski with risk and willing to make mistakes," he said.
"Mikaela didn't match Vlhova's intensity because technically Mikaela is the better skier.
"In the slalom I think we'll be in for a bit of a show because I don't think she'll back off in that -- she has a gold medal already in the championships and I think she'll be ready and hungry to fire in the slalom."
(Reporting by Martyn Herman; Editing by David Goodman, Ken Ferris and Toby Davis)
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