On her international debut, the 15-year-old Meilutyte clocked 1:05.47 to touch the wall first, Xinhua reported.
American Rebecca Soni, silver medallist at Beijing Games, chased her to finish second in 1:05.55. The bronze medal went to Japan's Satomi Suzuki who posted 1:06.46.
"I can't believe it. It's too much for me," said Meilutyte in tears.
"It was hard and difficult. At the moment I can't speak too much. But it means a lot to me and I'm so proud," said Meilutyte, who trains in Plymouth, Britain.
Lithuania's Ruta Meilutyte poses with her gold medal
She easily seized the lead after diving off the block, and never looked back to touch the end. A capacity of Lithuanian athletes, coaches and volunteers roared on the tribune for her, sharing with her the historic success.
Soni was little disappointed for a silver but she said learned something along the way.
It is the first-ever Olympic medal for Lithuania. Meilutyte is the sole female swimmer of her country in London together with other three male swimmers in the squad.
A day before, the teenager blazed set an European record of 1:05.21 in the women's 100 metres breaststroke semifinal as the fastest qualifier, also her personal best.
Only three swimmers have been faster than Meilutyte in history, world record holder Jessica Hardy (1:04.45), Rebecca Soni (1:04.84) and Liesel Jones (1:05.09).