The 29-year-old beat Arianna Errigo 12-11 in a final that went to sudden death after 38-year-old star Valentina Vezzali, bidding for an historic fourth consecutive gold in the event, had been forced to settle for bronze in even more dramatic fashion.
Vezzali, who carried Italy's flag at the Opening Ceremony, came back from the huge disappointment of losing her semi-final to Errigo to beat Nam Hyun-hee in overtime.
The police officer, whose incredible Olympic story began with a silver in Atlanta in 1996, trailed Nam 12-8 with only 13 seconds remaining but levelled with a second to go and then triumphed.
After breaking down in tears and kissing the piste, Vezzali said: 'I wanted to win a fourth (gold), but I go home with the bronze - it's ok.
'Today was very difficult. Five Olympic Games and all the time the pressure is more and more.'
No woman has achieved four straight golds in any individual Olympic competition - and the only men to have done it are Carl Lewis in the long jump (1984-96) and fellow American Al Oerter in the discus (1956-68).
Her third place means world number one Vezzali equals compatriot Giovanna Trillini with a women's record eight medals in the sport and Italy are now even stronger favourites for Team gold on Thursday.
In the final, Di Francisca was 11-8 behind to Errigo with 37 seconds left, but scored three times in the space of three seconds of action and needed only one extra second to take the title.