Worley, a bronze medallist two years ago, posted the fastest time in both runs on the Planai course, which has a steep and icy finish and is also being used by the men.
Worley finished in a combined time of two minutes 8.06 seconds to lead the field by over a second, a massive margin in skiing.
Defending champion Tina Maze of Slovenia, who has already won this season's World Cup GS title, came 1.12 back in second for her third medal of the worlds after winning the super-G and placing second in the super-combined.
Anna Fenninger of Austria was third, 1.18 behind to earn the home nation its fourth medal.
"A dream has come true," said Worley, who won seven races on the World Cup — all in GS. "I am very relieved. Winning in Schladming is great. This is not just a race, this is the world championship."
Marie-Michele Gagnon of Lac-Etchemin, Que., was eighth, her best result at a world championship and her second-best finish of the season in giant slalom.
Gagnon’s teammate Marie-Pier Prefontaine, of Saint-Sauveur, Que., had a tough second run and finished 28th, while 17-year-old Mikaela Tommy of Wakefield, Que., didn't finish her first run.
"It was a fight but I laid it out there, I attacked," said Gagnon, who is competing at her third world championships. "For sure, some mistakes happened but I gave it all I had today and eighth place — I’m really happy. It was a great experience — the crowd was crazy."
Worley said the rock-hard course, including an unusual steep part for a women's GS, favoured her.
"I like difficult hills," Worley said. "I knew before the start I could be really fast on this hill. I just had to ski freely and avoid mistakes."
Worley's victory followed up on gold for Marion Rolland in downhill, silver for Gauthier de Tessieres in super-G and bronze for David Poisson in downhill.
"I am very proud of them all," Worley said. "We have a great atmosphere in our team and now I am a part of the party."
France won its sixth gold medal in women's GS at the worlds and matched the record held by Switzerland.
After winning four races this season, Maze started as a clear favourite but was already over a second behind Worley after a disappointing opening run.
Maze had to adjust her line shortly after the start and never looked comfortable as she struggled for rhythm.
The Slovenian bounced back by putting in an attacking second run with an impressive finish.
"This medal is nicer than all others," Maze said. "I had a bad feeling after the first run. Everything went wrong and I was very down. It was my worst run all season. I tried to stay positive and then my second run was really great."
Fenninger, who lost her super-combined title last week, was relieved to finally win a medal in her last event at her home worlds.
"It was an extremely difficult world championship," Fenninger said. "Somehow I didn't believe in (a medal) anymore. It was hard, all the pressure. Today, I just tried to have fun while racing."
After failing to finish both the super-G and the super-combined races, and placing 11th in downhill, Fenninger left the team base near Schladming for two days and went home.
"I was thinking, 'what is really important to me?' That's just ski racing," Fenninger said. "I tried to forget all the rest and ski like it's just an ordinary World Cup race."
In her first appearance at a major championship, American teen Mikaela Shiffrin finished 2.30 behind in sixth for her career best GS result.
"I had a lot of fun today and I think I skied well," Shiffrin said. "I know where I can improve so it's always a good feeling coming out of a day knowing that you can be better but you did well."
Shiffrin will be among the favourites for Saturday's slalom.
Olympic champion Viktoria Rebensburg was slowed by a rib injury following a training crash on Wednesday and finished 3.33 off the lead in 11th. Her German teammate, former overall champ Maria Hoefl-Riesch, was 3.09 back in ninth.
Former Olympic champion Julia Mancuso had two below-par runs and finished 4.74 off the lead in 22nd.
The GS featured a record 139 starters from 55 nations, including China, Uzbekistan, India, Iran, Libya, Taiwan and Armenia. Several skiers finished more than 30 seconds off the lead.
Varsha Devi of India needed almost twice as much time as Worley to complete her run and finished in 2 minutes, 5.99 seconds.
Only the top 60 qualified for the second run.
The men's GS is on Friday.
— With files from The Canadian Press