She finished ahead of compatriot Sabine Voelker, and Jennifer Rodriguez of the United States.
Friesinger crossed the line in 1 minute 54.02 seconds, shaving .36 seconds off the mark she set at the Calgary Olympic Oval in March 2001.
Voelker finished in 1:54.97 for her third medal of the Salt Lake City Games. She also has a silver and a bronze in the sprint events.
Friesinger who just missed a medal earlier in the Games by finishing fifth in the 1000 and fourth in the 3000 metres.
She had been unbeaten in any World Cup race before the Olympics and was being touted for three or four golds.
Friesinger's victory promises to be good news for the inhabitants of her hometown of Inzell in Bavaria.
The skater vowed to throw a three-day party with free beer if she came back with a gold medal.