The athlete only broke the 29-year-old record last month but managed to clock 45.94 seconds in the Japanese capital.
He knocked almost one second off his previous world best of 46.70secs which he set in Oslo at the start of July.
He finished ahead of the USA's Rai Benjamin (46.17s) who was also inside the old record, and Brazil's Alison Dos Santos (46.72s).
With Benjamin posting 46.83 in the US trials, the record was widely expected to be broken in Tokyo, but nobody could have predicted the massive bites both men took.
Advertisement Warholm, 25, told the BBC: "You know the cliche that it hasn't sunk in yet? I don't think it has but I feel ecstatic. "I cant believe the time, it's so fast. A lot of the time I am asked about the perfect race. I said it didn't exist but this is the closest I've ever come.
"I told myself going in to the race, remember all the work you have put in. It was the only thing missing from my (medal) collection. I can't describe how important this is for me. This is what I do morning until night, it's huge."
Warholm led from the start but Benjamin looked like he was about to reel him in with 90 metres to go.
Yet Warholm found an extra gear to pull away in the final 60 metres and add the Olympic title to his two World Championship crowns and European gold.
When he saw the astonishing time, Warholm looked to be in shock. He ripped his vest apart and beat his chest in celebration before sinking to his knees.
"Both of them smashed the old world record. No wonder he rips his shirt apart - he is Superman in this event," said BBC commentator and former world 1,500m champion Steve Cram. "I cannot believe what we've just seen. Two men running times you could only dream of. Dos Santos was nearly within the old world record and he was miles back."
According to news.sky.com