Nicholas, from Birmingham, held her nerve to beat the American Nancy Lopez by one shot and follow in the footsteps of countrywoman Laura Davies, who won the Open in 1987.
The pressure was on the 35-year-old after she broke a 54-hole record in the previous round to open up a three-shot lead over Lopez.
Nicholas's four-round total of 274 was the lowest in the tournament's 52-year history. Nicholas and the veteran Lopez fought out a duel for the crown over the final 18 holes, which the Englishwoman, only the seventh player from outside the US to win the Open, completed in a par 71.
Lopez settled for second at 275, missing inches to the right with a 12- foot birdie putt on the final hole that would have forced a play-off. She was seeking her first US Open crown in her 21st attempt.
Nicholas was only 68th on this year's LPGA money list, and until this week she had only recorded two rounds in the 60s. However, the 1987 British champion built up her confidence during three tournaments in Europe recently.
"I played really well today," said Nicholas, who has two LPGA victories, both in 1995. "I'm absolutely delighted. I tried to hit fairways and greens and, obviously, I made a few putts as well."Reuse content