The 24-year-old surged ahead in the final five metres to beat world record-holder, Australian James Turner.
Stedman claimed the top spot for the first time in his career and set a national record of 53.36sec. World record-holder and Paralympic champion, James Turner, of Australia, settled for silver, finishing 0.16sec behind Stedman, and Fakhr Eddine Thelaidjia, of Algeria, claimed bronze in 54.53sec.
It was New Zealand's first gold medal of the world champs in Kobe, Japan. Dunedin Paralympian Anna Grimaldi capped off a memorable day with bronze in the 100m T47.
Stedman has mounted the 400m T36 podium four times at global championships but his win on Sunday was his first gold medal.
Stedman was in fourth place with 200m to go but timed his sprint to the finish brilliantly, passing Turner with a huge lunge before crashing to the ground over the finish line.
He also trimmed 0.19sec off his national record.
Stedman, who at age 16 was the youngest member of the Para-athletics team to compete at the Rio 2016 Paralympic Games, claimed bronze at the world champs in 2019 and then silver in 2023.
"It was as close as it's going to get to a perfect race," he said.
"I got out well and ran a good first 200m, staying nice and relaxed.
"Then started pushing around the bend and in that last 100m just focused on being relaxed.
"It wasn't until 50m to go when I saw Jimmy (Turner) getting closer and I thought something could happen here.
"Then in the last 10 metres, although my legs were completely shot, the momentum managed to carry me through.
"I'm really happy with the way I ran that race, in those conditions and to run a PB - is really cool.''
Grimaldi won bronze in the women’s T47 100m with a time of 12.72sec in wet conditions in Kobe last night.
The 27-year-old, who won her first bronze at last year’s world championships, finished behind Kiara Rodriquez, of Ecuador, who defended her title in 12.27sec and runner-up Saska Skolov, of Serbia, who was 0.07sec ahead of Grimaldi.
“I’m so stoked,’’ Grimaldi said.
“My immediate thought is I know I can run faster, which is exciting for the Paralympic Games. I’m content with where I am at now, but excited by where I can get to.”
Grimaldi will be back in action in her specialist long jump event on Friday (1.30pm NZT).
It capped off a memorable day for New Zealand after Will Stedman was crowned the world champion in the men’s T36 400m.
Danielle Aitchison is the only Kiwi to compete today, racing in the women’s T36 100m final at 10.22pm.
By RNZ and kayla.hodge@odt.co.nz
