The Australian inched clear over the final 50m to touch in 3min 56.69sec. Only world record holder Ledecky has ever gone quicker.
 Ledecky hit the wall for silver in 3:57.36, with China's Li Bingjie a distant third in 4:01.08.
"At the 200, I was a little bit worried, like I knew she would be there. No-one's going to come to an Olympics, especially Katie Ledecky, unprepared," said Titmus.
"So I guess I just had to trust myself. I tried to stay as composed as I could and use the speed that I have. 
"To pull it off in the backend against someone who has an amazing second half of her race, I'm really proud of that."
Ledecky came to Japan on the back of winning four gold medals and a silver at Rio in 2016, but Titmus has been snapping at her heels, ousting her as world champion in 2019 and topping the timesheets this season.
"I think I flipped at the 300, I saw she was there. I just wanted to give all I had, I fought tooth and nail," said Ledecky.
"I can't be disappointed with that, it was a good time from me, an awesome swim by her."

• Britain's Adam Peaty wins 100m breaststroke gold to defend Olympic title  

Adam Peaty became the first British swimmer to defend an Olympic title Monday when he claimed gold in the 100m breaststroke, clocking the fifth fastest time in history.

The 26-year-old powered to the line in 57.37sec ahead of Dutchman Arno Kamminga in 58.00, the only other swimmer besides Peaty to ever go under 58.

Italy's Nicolo Martinenghi took bronze in 58.33.

• Canada's MacNeil wins women's Olympic 100m butterfly gol

Canada's Maggie MacNeil powered to the women's 100m butterfly gold medal in the third-fastest time ever Monday to unseat Swedish defending champion and world record holder Sarah Sjostrom.

MacNeil delivered a stunning burst of speed over the final 50m to touch in 55.59sec and edge China's Zhang Yufei (55.64) into second while Australia's Emma McKeon (55.72) who took bronze.

Sjostrom finished seventh, well off the pace.

"I actually have no words right now, I can't believe it," said MacNeil, the world champion who now has her first Olympic gold medal. 

"I couldn't see anyone. I was in the outside lane which I think worked to my advantage. I could focus on my race rather than looking at what other people were doing."

Zhang turned in front at the half-way mark followed by American Torri Huske, only for MacNeil to blast past them to hit the wall fractionally in front.

Sjostrom, who broke her elbow earlier this year and said the butterfly was her lowest priority in Tokyo, holds the world record of 55.48sec set at the Rio Olympics.

Dressel-led United States win men's Olympic 4x100m relay gold

A United States team spearheaded by Caeleb Dressel stormed to the men's 4x100m Olympic relay gold medal in the third quickest time ever Monday.

Zach Apple brought them home after Dressel led off, with sizzling legs from Bowen Becker and Blake Pieroni ensuring they touched in 3:08.97 ahead of Italy and Australia.