Chen, 19, led from the 14km stage and pulled away from the pack to finish the race in an Olympic record 1:18.46.
He was followed home by Guatemala's Erick Barrondo for silver and Wang Zhen, who had earlier led the field but took bronze.
Russia's Valeriy Borchin, the defending champion, had moved up to second by the 16km stage but collapsed with the finish in sight.
Chen picked up the pace to pull clear of the field and began high-fiving the crowd as he approached The Mall.
A late burst took Barrondo well ahead in second, with Wang 39 seconds behind the winner.