The 16-year-old from the Gulf Harbour Country Club shot a three-under-par 69 in the final round at the demanding Locust Hill Country Club in Pittsford to climb 20 places from tied 37th to a share of 17th place.
The final day proved to be a battle of endurance with the world's best golfers completing 36 holes to decide the championship after heavy rain forced the suspension of play of round one.
Ko's equalled her best finish in a major championship after she finished tied for 17th at the British Open at Hoylake last year where the field also completed 36 holes on the final day.
The New Zealand Women's Open champion finished six shots back from winner South Korean Inbee Park and Scottish pro Catriona Matthew who finished tied on a five-under-par four round total of 283.
Park outlasted Matthew to win the title in the three-hole playoff to secure back-to-back major championships.
Ko was happy with her final round effort. She teed off the 10th tee and had a solid outward nine making the turn in one-under-par 36. She carried that momentum on the homeward stretch with three birdies to open her second nine to get to four under for the day.
Ko dropped a shot on the par four sixth, her 15th, and then parred her way home to sign for a 69. She had rounds of 77, 70, 73 and 69 in a performance that once again underlined her world-class ability.
It could have been so much better for the youngest winner in professional history. She will rue her opening five over par 77 in the wet conditions and in round three she suffered a disappointing run. She opened with two birdies
before dropping six shots in a four hole stretch to lose touch with the top 10.
But she rallied superbly with four birdies and a bogey from that point to sign for a one over par 73 in an impressive display of resilience.
