Second place went to Italy, just 0.3 seconds behind, with Germany taking the bronze.
The Norwegian team was anchored by Thomas Alsgaard, the sole survivor of the Nagano squad that took gold in 1998.
He raced with Italian Cristian Zorzi breathing down his neck over the final 10km.
The Norwegians had held an 11-second lead at halfway on Sunday but at the end of the third leg it was down to just 0.5 seconds, setting up an enthralling finale.
In a sprint to the line it looked as if Zorzi might prevail, but Alsgaard dug deep to retain the title.
"I must admit that an individual gold means more to me, but I am happy and it is good for our medal count"
The Italian overtook Alsgaard on the final uphill of the race before his opponent pulled level just before the final sprint.
Zorzi, the winner of two sprint events in this season's World Cup, then started his dash to the line early and looked to be en route to gold.
However, Alsgaard pummeled the snow with his poles to overtake the Italian only metres from the finish line to collect his fourth Olympic title and also add to the silver he won in this year's combined pursuit.
"It's not the fastest skier that wins, it's the person with the freshest legs, and that was me," said Alsgaard after the race.
But he also insisted that the feeling of victory did not compare with that he experienced in 1998 when he won gold in the 15km freestyle pursuit individual event.
"I must admit that an individual gold means more to me, but of course I'm happy and it's good for our medal count," he said.