The American was third after the first run but came out in blistering form to claim the crown with a run of 59.82 seconds giving her a combined time of 1:57.05 - a clear 0.58 quicker than second-placed Anna Swenn Larsson.
Swiss Wendy Holdener lead after the first run but made a big error at the start of her second run to drop off the podium entirely and drift to 17th place overall. The bronze went to Petra Vlhova who put in a tremendous effort in her second run to make up time lost in the first.
'Breathtaking!' - See the run which delivered world slalom title for Shiffrin
An emotional Shiffrin spoke after the results were officially announced about the illness that had impacted on her race, as it had earlier been revealed she was suffering from a "chest cold."
Shiffrin thanked her team and said: "Everyone around me was helping me to breathe," adding, "halfway down this run I ran out of oxygen."
Shiffrin: Halfway down the run I ran out of oxygen!
Though she admitted she had doubted herself, she said: "It was tough today, but my skiing – especially the second run – was really good. I was really pushing."
On Holdener, she said: "Her skiing was so good, so I feel really lucky right now."
A delighted Anna Swenn Larsson did enough to secure a silver medal in front of a home crowd in Sweden, and said afterwards: "I’m so happy it feels amazing to do this today at home in Are. I love Are and to take my first medal is incredible."
Shiffrin crowned world slalom champion for fourth time
Shiffrin also claimed the Super G title in Are, as well as winning bronze in the giant slalom.
Eurosport expert Bode Miller said of Shiffrin's illness problems:
I saw Mikaela this morning and she was pretty wiped out [with a lung infection]. It looks like someone has sapped the energy out of her and that’s not a good place to be going into a World Championship slalom even if you are as good as she is. For her to put that kind of skiing down in that second run especially, and not really breathing – something that is so important in slalom because the rhythm is so quick – just proves where she stands in the slalom in the world.
Holdener edged American Mikaela Shiffrin, who has dominated so far this season, into second place with a time of 57.08 giving her a lead of 0.15s.
Swede Anna Swenn Larsson followed with a run of 57.19 to take second place ahead of the second run.
Wendy Holdener sets pace in first slalom run
Petra Vlhova, currently second on the World Cup leaderboard behind Shiffrin and having won gold on Friday in the Giant Slalom, couldn’t muster better than fifth place, with the earlier bibs benefitting from more favourable conditions on the course, given poor weather.
Bib number 15, German Christina Geiger did her best to put paid to that school of thought, putting in an effort of 58.59 to fight into seventh place.
'A little nervous out of the gate?' - Shiffrin's first slalom run at World Championships
1. Mikaela Shiffrin (USA) 57.23 59.82 1:57.05
2. Anna Swenn Larsson (SWE) 57.19 1:00.44 1:58.08 +0.58
3. Petra Vlhova (SVK) 57.54 1:00.54 1:58.08 +1.03
4. Katharina Liensberger (AUT) 57.35 1:00.54 1:58.08 +1.43
5. Frida Hansdotter (SWE) 57.64 1:01.80 1:59.44 +2.39
6. Laurence St-Germain (CAN) 58.60 1:01.05 1:59.65 +2.60
7. Katharina Huber (AUT) 58.66 1:01.19 1:59.85 +2.80
8. Katharina Truppe (AUT) 58.93 1:01.05 1:59.98 +2.93
9. Bernadette Schild (AUT) 59.20 1:01.26 2:0046 +3.41
10. Erin Mielzynski (CAN) 58.99 1:01.60 2:00.59 +3.54