Steinhauer, whose only other notable victory came in the Du Maurier classic six years ago, began the day four strokes behind the leader Janice Moodie and ended it two ahead of the Scot who closed with a 75, three over par for the day, six over for the championship.
Moodie had seen off the challenge of her playing partner, the 43-year- old Betsy King but was caught and then overtaken not only by Sherrie but also Brandie and Sophie.
In her rookie year, Moodie, who is ineligible for the Salheim Cup Match between Europe and US at Muirfield Village, Ohio, next month because she has not played a sufficient number of tournaments in Europe, won pounds 30,000 for fourth place, but a lack of conviction on the greens cost her dearly.
She seemed set to enjoy the Weetabix with milk and honey when she birdied the eighth and the 12th to leave the field trailing behind her blonde pony-tail but bogeys at the 14th and 16th allowed Steinhauer, Brandie Burton and the Swede Sophie Gustafson to move to the top of the leader board.
After playing an excellent chip at the 14th to within two and half feet of the flag, Moodie missed the putt for par and she also missed from five feet for a birdie at the 15th. "The wind made things really, really tough," Moodie, who learnt her golf at Windyhill, Glasgow, said.
Steinhauer, meanwhile, led a charmed life, particularly over Royal Lytham's formidable back nine. Beginning the round with a bogey four at the first, her only dropped shot, she went to the turn in 35 and came home in regal style with birdies at the 11th, 13th and 18th. With a south-westerly gusting at up to 33 mph, it was an impressive performance. She was the only player to break 77 in the final round on a day when many had trouble breaking 88.
With Gustafson in the clubhouse at five over for the tournament following a 70, the decisive stroke from Steinhauer came at the last. With the odds on a sudden death play-off she hit a magnificent six-iron approach shot from 156 yards into a cross-wind to within eight feet of the hole and her birdied putt just had enough momentum to role into the cup when it looked, for a moment, as if she had left it on the lip.
After her 81 on Thursday, Steinhauer improved with a 72 and a 70. "After the first round I had a dream that I was getting an early flight home," she said. "My first aim was to make the cut, then finish in the top 10. I really enjoyed playing in the wind. It's a challenge and it helped me to stay focused."
Gustafson , who won pounds 50,000 to considerably improve her chances of playing in the Salheim Cup, was paired with Australian Carrie Webb. When Webb, who won the championship 12 months ago at Sunningdale at 19 under par, 23 strokes better than Steinhauer's aggregate yesterday, went to the turn in 33 it looked as if she might retain her title. But it was Gustafson who made the advance with three birdies in four holes from the 13th.
She was subsequently joined at five over by Burton who came in with a 71, but both were trumped by Steinhauer's beautiful judged six-iron at the 72nd hole. It was the perfect club at the perfect time.
One of the more interesting scores was an 87 from Muffin Spencer-Devlin. She came home in 46 after a triple-bogey seven at the 16th and a quintuple bogey nine on the 17th. The American finished with an aggregate of 319, 31 over par.
Nor did Se Ri Pak cover herself in glory. "You have to learn many things to play in many temperatures," the 20-year-old Korean, who has won two major titles this season said. "I learned many things, this is golf. It's up and down." Yesterday she had trouble up and down, closing with a 77, 20 over par for the tournament.Reuse content