The American entered the final round with a one shot lead and with a vociferous crowd cheering his every shot, he embarked on a roller coaster afternoon that saw him relinquish his lead before briefly extending it to five shots after the turn.
Bogeys on the 13th and 14th saw things tighten up down the stretch but Mickelson held his nerve to finish at six under after a 73 and win his sixth Major Championship by two shots.
At 50 years and 341 days, the Californian is over two years older than Julius Boros was when he won this event in 1968, and 208 days older than Miguel Ángel Jiménez was when he claimed the 2014 Open de España.
South African Louis Oosthuizen and two time champion Brooks Koepka finished at four under, two shots clear of Irish pair Padraig Harrington and Shane Lowry, England's Paul Casey and American Harry Higgs.
Mickelson had long been considered the best player not to win a Major before he claimed the first of three Masters Tournament victories in 2004 at the age of 33.
That opened the floodgates and he won this event in 2005 as well as the 2013 Open Championship, with his 11th European Tour win on the Ocean Course seeing him match the Major tally of Sir Nick Faldo and Lee Trevino.
"This is just an incredible feeling because I just believed that it was possible but yet everything was saying it wasn't," he said. "I hope that others find that inspiration.
"It's very possible that this is the last tournament I ever win if I'm being realistic. But it's also very possible that I may have had a little bit of a breakthrough in some of my focus and maybe I go on a little bit of a run, I don't know.
"I thought the 2009 Open Championship performance by Tom Watson was one of the greatest sporting performances and he hit a perfect second shot, too. He couldn't land it any better and it still went over. It was one of the greatest performances in the sport and it's inspiring to see people like that do it.
"And I hope that this inspires some to just put in that little extra work because first of all, there's no reason why you can't accomplish your goals at an older age. It just takes a little more work."
There was drama right from the word go as Mickelson three putted the first and Koepka holed a 12 footer for birdie and a two shot swing.
More was to come on the second with Koepka carding a seven after finding sand off the tee and hitting a duff chip with his fourth, while Mickelson got up and down for birdie to lead by two.
Both men missed the green at the par four third where the tee was moved right up and Mickelson saw his lead cut as he failed to get his first chip up the bank and onto the green, with Koepka missing a birdie chance from three feet as the breakneck start continued.
Mickelson holed a spectacular bunker shot on the fifth to lead by two again but he failed to get up and down on the sixth and Koepka put an approach to three feet to share the lead.
The roller coaster continued on the next as Koepka found himself in big trouble after his second and made a bogey, with Mickelson getting up and down on the par five to lead by two once again.
This is just an incredible feeling because I just believed that it was possible but yet everything was saying it wasn't. I hope that others find that inspiration
It stayed that way at the turn but Mickelson put his approach to 12 feet on the tenth and Koepka found a waste area for yet another two shot swing and the lead was up to four.
A poor lay up on the 11th saw Koepka drop another shot and while Oosthuizen's round may not have had the fireworks of the final group, he was the nearest challenger.
The 38-year-old failed to get up and down from a bunker on the fifth but successfully did so on the seventh to go with six regulation pars and a save on a level par front nine.
A horrible lie in a waste area led to a dropped shot on the tenth but he holed from 20 feet on the 12th to cut the lead back to three.
He found water on the next for a double bogey and Mickelson had a five shot advantage but the leader found the same water himself to drop a single shot.
Another dropped shot came on the next as Mickelson missed the green off the tee and he was three ahead with four to play.
Oosthuizen took advantage of the par five 16th but so did Mickelson and Koepka, who made it two birdies in a row to bounce back after also dropping a shot on the 13th.
Mickelson went over the back of the 17th green and saw his lead cut to two but in remarkable scenes that saw a huge crowd follow him down the fairway, he parred the last to enter the history books.
Oosthuizen carded a 73 with Koepka recording a 74, while playing partners Harrington and Lowry both signed for 69s, Casey registered a 71 and Higgs finished with a 70.
Outgoing champion Collin Morikawa, fellow Americans Tony Finau, Rickie Fowler, Scottie Scheffler, Kevin Streelman and Will Zalatoris, Mexican Abraham Ancer, Spaniard Jon Rahm and England's Justin Rose finished at one under.