Defoe, who spent last season with Toronto FC of Major League Soccer, met a ball that dropped over his shoulder with a first-time, left-footed volley that dipped into the top corner from 22 metres, clinching Sunderland's 1-0 win over northeast rival Newcastle.
The goal came in first-half stoppage time and reduced the former England international to tears as he walked off for halftime.
Sunderland moved three points clear of third-to-last Burnley, which occupies the final relegation spot after drawing 0-0 at home to Tottenham in Sunday's other game.
Fresh off his debut goal for England last week, 21-year-old striker Harry Kane — the league's joint-leading scorer — captained Spurs for the first time but was subdued as the team's slim hopes of Champions League qualification took a hit.
Sixth-place Tottenham moved level on points with Liverpool and is provisionally seven points behind fourth-place Manchester City, whose game in hand is against Crystal Palace on Monday.
The Premier League was spoilt with wonder goals on Saturday, arguably the most eye-catching coming at Stamford Bridge where Stoke midfielder Charlie Adam scored with a shot from about 65 metres against Chelsea. Then there was Manchester United striker Wayne Rooney's volley-on-the-turn against Aston Villa and Bobby Zamora's chip with the outside of his foot in Queens Park Rangers' win over West Bromwich Albion. Bafetimbi Gomis scored with an overhead kick for Swansea, too.
But for pure technique and importance, Defoe's may top the lot.
"Unbelievable feeling. Words can't describe how I felt," Defoe said. "But in a game like this, any goal is amazing, even a tap-in."
Sunderland maintained its dominance of the most important fixture in the club's schedule. The team has now won five in a row against Newcastle and extended its unbeaten top-flight run against its rival to seven matches. Both of those are club records.
Sunderland ended an eight-game winless run in all competitions with a first victory under temporary manager Dick Advocaat, who replaced Gus Poyet last month with the team hurtling toward the bottom three. Advocaat, a much-travelled Dutch coach who has three decades of managerial experience, is in charge until the end of the season and tasked with keeping the club in the lucrative Premier League.
"We have still three home games to go," Advocaat said. "We have to win them as well."
In Sunderland's last home game, fans streamed out of the ground at halftime with the team 4-0 behind to Aston Villa in one of its most embarrassing performances of recent times. Three weeks later, they were singing the name of an emotional Defoe, who wiped tears away with his shirt as he headed toward the dressing rooms.
"It was such a nice goal, it has to count for two," Advocaat said.
Newcastle's best chance came in the 88th minute when Ayoze Perez volleyed over from eight meters. The team has lost four straight games but should be safe, with nine points separating it from Burnley.
"The way we played in the first half, we were abysmal," caretaker Newcastle manager John Carver said.
Kane has been a revelation in his breakthrough season, scoring 19 league goals and also 79 seconds into his England debut last week, but he was starved of service at Turf Moor.
Nevertheless, he was proud of getting the captain's armband.
"You could say it has been the best week of my life — to make my first (international) start and score for England, and to be captain today," Kane said. "It has been an unbelievable couple of weeks and one I won't forget for the rest of my career."
Burnley created the better chances, with striker Danny Ings forcing two saves from Spurs goalkeeper Michel Vorm in the first half. Christian Eriksen drove Tottenham's best opportunity over the crossbar in the 69th.