Kostelic took full advantage after Hirscher was disqualified in the first run, and was almost flawless in the second leg. He finished with a combined time of one minute 45.67 seconds to beat Andre Myhrer of Sweden by 0.85 seconds. Fritz Dopfer of Germany was third, 0.88 behind Kostelic.
The 32-year-old Croatian has now won five of the last seven World Cup events raced at the storied Swiss venue since January 2010.
"I guess I have something with this mountain like no other," said Kostelic, whose third straight win in the Wengen slalom matched Swedish great Ingemar Stenmark (1975-77).
"To find yourself in the same sentence as Ingemar Stenmark is the greatest honour. Unlike many other racers ... I really am following the history of skiing. They were legends for me."
Mike Janyk of Whistler, B.C., finished 19th, two spots ahead of teammate Brad Spence of Calgary. But Spence's finish was special because eight-year old Gage Ferguson of Calgary was on hand.
Ferguson served as Spence's personal sponsor and Spence wore a special helmet sticker bearing Ferguson's name. In additional, a sponsor flew Ferguson and his family to Switzerland to be present at the race and watch from finish area.
Ferguson, who has Asperger's Syndrome, greeted Spence with a hug at the bottom of the hill. Asperger's Syndrome is an autism disorder characterized by difficulties in social interaction, alongside restricted and repetitive patterns of behaviour and interests.
"In a world where sponsorship is so closely tied to corporations, giving Gage the opportunity to be my sponsor without the monetary value involved was really special for me and special for him, too," said Spence, 27. "It was an opportunity to show him that’s anything possible if you have a dream.
"That's the message I hope he takes with him."
Ferguson first met Spence after the 2010 Winter Olympic Games and began saving money when he heard Spence was looking for a "head-gear sponsor." He sent Spence a letter and made a video, asking if the World Cup star could fulfill his dream of becoming his sponsor.
On Dec. 23 in Calgary, Spence announced he would grant the boy his wish and the money he saved up — a total of $149.39 — was donated to the Branch Out Foundation, which raises funds for research into therapy for neurological disorders with the aim of finding a cure for the various complications of the nervous system.
"It was great — the best," Ferguson said. "It's like having a birthday in Switzerland.
"It's awesome. Coolio-cool and awesomest-awesome."
Meanwhile, Kostelic's 22nd career World Cup victory also completed his Wengen weekend double of slalom and super-combined for the second time.
His performance was roared on by hundreds of flag-waving Croatian fans among the 8,000 spectators, with one lighting a red smoke flare in celebration.
"It gave me a warm feeling around my heart," Kostelic said.
Myhrer, now twice a runner-up to Kostelic here, said he believed his leading time could hold up against his good friend, who had been third-fastest in the morning run.
"I don't know what I should do to beat him. He totally crushed it down there," Myhrer said.
Kostelic, the defending overall champion, earned 100 World Cup points and cut Hirscher's lead to 30 points. He also extended his lead over Hirscher in the slalom standings to 125 points.
Hirscher had been unbeaten in 2012, winning his last three races. But he was disqualified after the first run — when he would have been fastest by 0.77 — because he straddled a gate.
"It happens. What should I say? I skied an awesome run," Hirscher said. "Everybody can see that I am really, really fast. And that is pretty cool."
Hirscher said he had not realized his error.
"I feel something but I couldn't feel exactly what happens," the 22-year-old Austrian said. "Sometimes you hit the gate pretty close and then there's not a difference between straddling and hitting a gate pretty hard.
"I have to cancel this race out of my mind and look forwards."
Hirscher competes only in slalom and giant slalom races this season, and failure to score points Sunday won't change his plan to skip the super-G race on Friday at Kitzbuehel, Austria, which Kostelic won last year.
"No. Not interesting," Hirscher said.
American Bode Miller completed the first run but didn't qualify for the second. Countryman Ted Ligety, who aimed to rise from fourth in the overall standings, skied out at the fourth gate.