The USA swimmer had equalled her own world mark in qualifying this morning and returned tonight for a dominant victory, leading from the gun to win in 1:13.33, 1.41 inside her world record.
Fellow 17-year-old Ellie Simmonds was second as the Briton claimed her fourth medal of the meet in 1:14.82, more than two seconds ahead of Tanja Groepper in third.
Arlen said: 'To have three medals in my first big meeting, it's something I never would have expected. I feel really great and I'm really enjoying it.'
Her rivalry, albeit a friendly one, with Simmonds looks set to be long-term.
She added: 'It's tough but I love racing Ellie. It's great and she's a sweetheart. It's sometimes hard when people are cheering against you, but it's really an energetic crowd and it pushes us all on.'
Simmonds echoed her sentiments, saying: 'We are both the same age and I hope it goes on for a long time because it is pushing me to the best of my ability and it is pushing her as well.
'So I think we are going to have a great rivalry. Hopefully she'll go to Rio (2016) and I'll go to Rio and World Champs next year in Canada - we'll push each other on.'
In the men's equivalent, Xu Qing clocked a winning time of 1:05.82.
In other finals tonight, Mary Fisher claimed her first title, but fourth medal, in the 200m Individual Medley - SM11 in a world record time of 2:46.91. Yang Bozun won the men's event.
Pavel Poltavtsev and Khrystyna Yurchenko claimed gold in the men's and women's 100m Breaststroke - SB9, with Mikhail Zimin and Natali Pronina successful in the 100m Breaststroke - SB12.
The 100m Freestyle - S5 titles were won by Daniel Dias and Teresa Perales, while Oleksii Fedyna and Prue Watt prevailed in the 100m Breaststroke - SB13 events.
There were also wins for Gustavo Sanchez Martinez in the men's 200m Freestyle - S4, with Min Byeong-Eon taking the men's 50m Backstroke - S3 title.
In the final Aquatics event of London 2012, China set a new world record of 4:09.04 in the men's 4 x 100m Medley Relay - 34 points.
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