Christchurch professional multisporter Mike Phillips also galloped around the Wanaka course to win the elite men’s title in 3hr 45min 26sec.
It was Phillips’ first Challenge victory after recording several second and third placings at previous events.
Donaldson, 28, has been doing triathlons for fun, but decided this year she would chase a professional licence.
Strong age group performances this season meant local fans were backing her as their hometown heroine, despite no professional elite women category at Challenge Wanaka this year.
"I feel great. I didn’t know how that would be ... I just loved the community, and everyone cheering me on. Everyone else had the biggest smile on their face but I was just suffering."
She had a lot of highs during her race, despite the punishingly hot conditions, problems with her hydration system and navigating the short drop zones at the aid stations.
Donaldson is a very strong swim-biker, so took the lead from the start.
Before the race, she had not been confident about the strength of her run.
On the day, she was thrilled with her half-marathon result of 1hr 40min 20sec.
Her splits for the 1.9km swim (26min 9sec) and 90km bike (3hr 8min 8sec) gave her a solid lead over Porirua’s Deborah Lynch (4hr 46min 16sec), who was racing again just one week after winning the 243km Coast to Coast multisport race.
Phillips has been a professional triathlete on the national and international circuit for a long time and has had 23 podium finishes from 29 international ironman or Challenge races.
Coached by the highly regarded John Hellemans, Phillips turned to long-distance triathlon in 2015, and on Saturday made racing in Wanaka’s withering heat look easy.
The air and water temperature were hovering around 20°C at 7am, and race officials permitted a non-wetsuit swim for the first time in Challenge Wanaka’s 19-year history.
However, most chose to stick to the wetsuit, including Phillips, who flew through the water in 24min. Xander Marsh, of Christchurch, trailed just 3sec behind.
As the temperature soared to 30°C in next to no time, Phillips turned the screws on his elite male rivals — racing for glory, not money, this year.
He pumped through the hilly bike leg in just over 2hr and produced a 1hr 21min 23sec half-marathon to finish 15min in front of Christchurch professional Tom Somerville (4hr 9min 53sec).
Phillips said he enjoyed racing in Wanaka.
"We don’t get all that many opportunities to race around the year — maybe 10 times — so to come down and get a good run through before Ironman New Zealand in a couple of weeks is very useful.
"Just practising transitions, getting your wetsuit off, all those sorts of things you don’t normally do, and it was a great opportunity to get a hit out too."
