Synchronised, ridden by Tony McCoy, won the Cheltenham Gold Cup as two-time victor Kauto Star was pulled up in the early stages.
The 8-1 shot grabbed the lead over the final fence and held off the challenge of 50-1 outsider The Giant Bolster.
Defending champion and 7-4 favourite Long Run finished third.
McCoy, celebrating his second Gold Cup triumph, said: "He's an amazing horse and it was an amazing performance. He's really delivered."
Midnight Chase set the early pace and there was drama at the second fence when What A Friend, part-owned by Manchester United manager Sir Alex Ferguson, fell.
Soon afterwards it became evident that Ruby Walsh was not happy with Kauto Star and pulled him up with 13 still to jump.
Time For Rupert got the better of Midnight Chase before four out but he was soon swamped.
The Giant Bolster, ridden by Tom Scudamore, looked like landing a major shock as he took the lead on the turn for home.
Long Run, ridden by Sam Waley-Cohen, was in contention but he failed to show the same acceleration that won the race 12 months ago.
Burton Port also tried to close, but it was Synchronised who was delivered to perfection by McCoy, his stamina proving crucial.
Jonjo O'Neill, celebrating his first Gold Cup as a trainer, said: "AP [McCoy] was brilliant on him, he knows him so well. Our big worry was keeping him in the race as, if he makes mistakes, he gets behind.
"A lot of work has gone into him at home so it was a great team effort from the yard. He only came right in the last 10 days or so and we weren't really confident.
"He flowered in the last few days and it was spot-on timing. It's fantastic to win it as a trainer."
Trainer Paul Nicholls said his charge Kauto Star, whose participation in the Gold Cup was in jeopardy following a schooling fall a fortnight ago, was unscathed.
"He's absolutely fine. Ruby wasn't happy after he'd jumped a couple of fences and we said if he wasn't happy to pull him up, and he's done the right thing," said Nicholls.
Kauto Star's owner, Clive Smith, said it was "90% certain" the legendary 12-year-old - Gold Cup winner in 2007 and 2009 - would be retired.
He said: "What a great career he's had and he's been a wonderful horse.
"I've been so proud to own him and also the support of everybody has been absolutely tremendous.
"I would say it's 90% certain that he'll be retired. Someone will have to come up with a very good reason for me not to retire him."
Trainer Nicky Henderson said of the defeated champion, Long Run, and fourth-placed Burton Port: "I'm thrilled with my two boys and I have to give credit to the winners.
"JP [Synchronised's owner JP McManus] is one of the stalwarts of National Hunt racing and Jonjo and AP are superstars.
"Long Run was not quite good enough on the day - he was always struggling to get to the pacemakers, but Sam [Waley-Cohen] rode a great race."
Earlier, Countrywide Flame struck a surprise blow in the JCB Triumph Hurdle, the 33-1 shot collecting top honours for John Quinn and Dougie Costello.
And Brindisi Breeze landed a rare Scottish Festival win when Lucinda Russell's charge upset the Irish favourite Boston Bob in the Albert Bartlett Novices' Hurdle.
Cheltenham Gold Cup result:
1 Synchronised (AP MCCoy) 8-1
2 The Giant Bolster (T Scudamore) 50-1
3 Long Run (Mr S Waley-Cohen) 7-4F
4 Burton Port (B Geraghty) 8-1
Triumph Hurdle result:
1 Countrywide Flame (D Costello) 33-1
2 Hisaabaat (AE Lynch) 20-1
3 Grumeti (R Thornton) 5-1F
4 Dodging Bullets (D Jacob) 20-1
Novices' Hurdle result:
1 Brindisi Breeze (CI Gillies) 7-1
2 Boston Bob (R Walsh) 6-5F
3 Grand Vision (TJ O'Brien) 25-1
4 Lovcen (R Thornton) 12-1