The 27-year-old held off countryman Jan Smeekens and twin brother Ronald as the Dutch team claimed a clean sweep of medals.
Defending Olympic champion Mo Tae-Bum finished outside of the podium in fourth.
In a closely-fought contest, Michel Mulder pipped Smeekens by just 0.01 seconds after two runs of the long track circuit.
Smeekens thought he had won the gold after the electronic scoreboard in the Adler Arena showed the number one ranking next to his name, however seconds later an adjusted time relegated him into silver medal position.
"At first I had mixed feelings because it was so close. I looked at the scoreboard and I thought that I'd won, and seconds later I saw I didn't," Smeekers said.
"But now I have to be happy with my second place. It was a very stressful day, and now I've won an Olympic medal. It's unbelievable."
The 26-year-old won the first race by 0.04 secs from Michel Mulder, but was unable to match the blistering pace he set with his opening 34.59 secs, recording a time of 34.72 secs in race two.
Michel Mulder followed up his first race time of 34.63 secs with a 34.67 secs in the second contest to leapfrog Smeekens.
"Now I have won everything there is to win. After all this work, I'm the Olympic champion, I can't believe it," he said.
After a disappointed first race that saw him finish down in sixth place, Ronald Mulder smashed the track record in his second contest, producing a time of 34.49 secs to go alongside his open 34.96 secs.
"My first race was not that good, so I knew I needed a real fast one to be a contender for the gold. And that's just what I did. I did a very good second race, it was almost perfect," he said.
"When you are in first place, and the others have yet to skate, you hope, you dream, but you know the others are just as good.
"My lane change was perfect, so I hoped that for the others the change would be more difficult, but it wasn't.
"If your twin brother becomes Olympic champion and you win bronze yourself, you have to be satisfied."