The 45-year-old Italian, who started 45 grands prix and raced at Brands Hatch in F3000 early in his career, won the men's Individual H4 Time Trial before lifting his bike above his head in celebration.
Zanardi lost both his legs in a 200mph accident while racing in the American Memorial 500 Cart event in Germany in 2001, and has made the transition to hand-cycling since.
Zanardi clocked 24:50 but had to watch his rivals finish before being certain of gold ahead of Germany's Norbert Mosandl (25:17) and Oscar Sanchez of the USA (25:35).
Elsewhere at Brands Hatch, Sarah Storey took her tally of Paralympic Games golds to 10 by claiming a third of a possible four successes at London 2012 with a dominant win in the women's C5 Time Trial. Storey finished in 22:40.
In the Olympic Stadium, Oscar Pistorius earned gold as South Africa won the 4 x 100m Relay T42/T46 in a world record time of 41.78.
Pistorius was pursued all the way down the final straight by Brazilian Alan Fonteles Cardoso Oliveira - who had beaten him on Saturday to 200m gold - but Brazil were later disqualified with China taking silver ahead of Germany.
Russia won the 4 x 100m T11/T13 for blind and visually impaired athletes by just 0.02 seconds from China, in a time of 42.66.
USA athlete Tatyana McFadden claimed her second gold medal of the Games with a dominant win in the 800m - T54.
The 23-year-old was a class apart from the rest of the field as she pulled well clear on the second lap and finished almost three seconds clear of Switzerland's Edith Wolf.
In the Aquatics Centre, Kirsten Bruhn brought her Paralympic Games career to a triumphant close as she secured Germany's first gold medal in the pool with victory in the 100m Breaststroke - SB5.
The 42-year-old added the gold in London to the titles she won in this event in both 2004 and 2008.
Bruhn led from start to finish to touch in 1:35.50 - 11.69secs ahead of Song Lingling of China, who set an Asian record.
Jessica Long picked up her fourth gold, and sixth medal overall, of London with victory in the 200m Individual Medley - SM8.
The USA athlete, who made her debut in Athens aged 12, set a new Paralympic record of 2:37.09, 4.70 seconds ahead of Russia's Olesya Vladykina.
Britain's Oliver Hynd became Paralympic Games champion in the 200m Individual Medley - SM8, the 17-year-old adding gold to the silver and bronze he had already won at the meet.
Siamand Rahman of Iran took gold in the mens +100kg powerlifting, comfortably beating Iraq's Faris Al-Ajeeli and Keun Bae Chun of Republic of Korea.
Egypt's Mohamed Eldib took gold in the -100kg category, while in the women's +82.50kg, it was Grace Anozie of Nigeria who won with a best lift of 162kg.
At The Royal Artillery Barracks, Sweden's Jonas Jakobsson took gold in the men's R7-50m Rifle 3 Positions - SH1 ahead of Doron Shaziri of Israel and China's Dong Chao.
Russia took gold in the men's Archery Team Recurve - Open final, beating Republic of Korea 206-200, while China beat hosts Great Britain to bronze, 206-193.
In the women's final, Republic of Korea took gold from China, 199-193, while Iran took bronze, beating Italy 188-184.
In the Wheelchair Fencing, Yu Chui Yee made it two wins in the space of 24 hours as the Hong Kong fencer added the women's Epee - Category A title to her Foil victory the day before to take her Paralympic Games career tally to seven gold medals.
Jovane Silva Guissone of Brazil won the men's Category B event, beating Chik Sum Tam, who had earlier dispatched defending champion Hu Daoliang of China.
USA duo Nick Taylor and David Wagner won their third consecutive gold medal in the Quad Doubles Wheelchair Tennis final as they beat Britain's Peter Norfolk and Andy Lapthorne 6-2 5-7 6-2.
In the women's Singles semi-finals, world number one Esther Vergeer won her 469th straight match, beating fellow Dutchwoman Jiske Griffioen 6-0 6-3.
The long-awaited start of the Wheelchair Rugby tournament saw the USA begin the defence of their crown with a 56-44 victory over Great Britain, with their defence just too strong for the hosts.
The USA stunned Germany early in the fourth quarter as they booked their place in the semi-finals of the Wheelchair Basketball tournament with a 57-46 win.
Patrick Anderson also led the impressive Canada through with 16 points and 14 rebounds in their 77-51 win over Spain.
There was drama in the Mixed Individual Boccia, with two matches going to a tie-break in the BC2 category at London's ExCeL.
A day after winning the Team BC1/BC2 gold medal for Thailand, Watcharaphon Vongsa produced a superb comeback in his last-32 match against Japan's Hidetaka Sugimura, coming back from 5-0 to level it 5-5, and then winning the tie-break.
Adam Dukovich also needed a tie-break to see off Great Britain's Zoe Robinson, who was mostly a substitute for the bronze medal-winning BC1/BC2 team, after their match also ended 5-5.
Defending champions Ukraine found their match in the 7-a-side football as they were held to a 1-1 draw by Brazil while Helena Lucas - the only woman in the Single-person Keelboat (2.4mR) fleet - will sail for gold tomorrow safe in the knowledge that she will leave London 2012 with at least a silver.
Lucas recorded an eighth and fifth today to put her in a strong position heading into race 11.
In the Sonar, Holland's Udo Hessels, Marcel van de Veen and Mischa Rossen are assured of gold as they boast a 20-point cushion over second-place Germany, while the same is true of Australia in the Two-Person Keelboat (SKUD18) class.
The USA women are through to a second consecutive Paralympic Games Sitting Volleyball final, having seen off Ukraine in straight sets, 25-14 25-13 25-19.
The big news in the Goalball came as Lithuania dumped defending champions China out of the men's tournament with a 12-4 defeat.