Twice runner-up and three-times a bronze medallist, Villumsen finally got to the top of the podium with a time of 40 minutes 29.87 seconds over the challenging 29.9km course.
Dressed all in black and riding a stealth black bike, Villumsen had looked set for a commanding victory until Dutchwoman Anna van der Breggen provided a late fright, crossing 2.54 seconds behind to take the silver.
Defending champion Lisa Brennauer of Germany had to settle for the bronze.
"I was getting used to being second and third and fourth and fifth but then it was just a day where everything went my way and I started to believe maybe halfway through," said Villumsen.
"I just gave what I could and felt really good all the way. I felt maybe this was my day."
Danish-born Villumsen won her first bronze medal competing for Denmark at the 2009 worlds and the next four years won medals for New Zealand, silver in 2011 and 2013 and two more bronze in 2010 and 2012.
The 30-year-old signalled her gold medal intentions early. going out in the last wave, Villumsen went on the attack and by midway had the best time by nearly 11 seconds.
Not satisfied, Villumsen stormed through the last kilometres coming home with a 26-second lead with only eight riders still on the course.
"I really can't believe it. It is an incredible feeling," said Villumsen.
"It's difficult being on the finish line and nearly there and not quite there.
"But it all played out my way today.
"Usually I fade out a little bit but today I was stronger at the distance. When I was halfway and I felt I wasn't empty, I still had something in the tank, I was, okay, this is going well."
For much of the day it appeared 42-year-old American Kristin Armstrong might write the feel-good ending.
Coming out of retirement for the chance to race at home, the two-time defending Olympic champion in the discipline set the early target of 40:50.45.
Just the second rider out onto the course, the 2006 and 2009 world champion waited and watched for over three hours before the final riders challenged her time and pushed her off the podium into fifth place.
