'The Power' used all his experience to come from behind and claim his 16th world title, clinching him the first prize of £200,000 and the chance to become the first player to lift the Sid Waddell Trophy.
What was seen as the dream final, pitting the old master against the young man tipped to take his place at the pinnacle of the sport, did not disappoint, with the two men combining for 16 180s and 129 scores of 100 or more.
Not once but twice Van Gerwen - who had produced some exhilarating arrows to knock out two-time reigning champion Adrian Lewis and then James Wade in the last two rounds - found himself two sets clear, only on both occasions for his opponent to battle back.
The Dutchman drew first blood courtesy of a 140 check-out and then doubled his advantage thanks to registering the first break of throw in the eighth leg.
Taylor, though, responded in the fashion you might expect from a multiple champion. He missed out on a first break of his own when his opponent took out 123 on the bull, only to strike when it mattered in the deciding leg of the third, cutting the deficit in half.
The fourth also went his way, although only after Van Gerwen failed with a dart at double 20 to go 3-1 up, and he edged ahead for the first time on the night when he won the third leg of the next set.
However Van Gerwen won five of the next six legs in a hurry, suddenly finding the prolific scoring form that had seen him come so close to back-to-back nine-darters against Wade. It left Taylor biting his flights in a show of concern.
Yet he had no need to panic. Once again he clawed his way back, pinching the seventh set after his rival couldn't land double 16. The Stoke thrower edged a set clear for the first time when he followed up an 11-dart leg with a break against the throw in the ninth.
The loss of the that set seemed to break van Gerwen's resistance, the finishing issues that had blighted him earlier in the event coming back to haunt him as the pressure began to mount.
Taylor - who had questioned his very future in the sport after his semi-final spat with great rival Raymond van Barneveld - hit double 16 to move a set away from glory before finding the same bed again to finish proceedings.
"I'm probably the proudest man in the world," Taylor told Sky Sports 1. "I've got to give Michael everything. He's phenomenal that kid and I honestly didn't think I was going to win.
"I was 2-0 down, then 2-2, then 4-2, then 4-4. I just couldn't seem to crack him, and in my mind I'm thinking it's his first time, maybe he'll miss a couple of doubles.
"All of a sudden my darts that were going on the wire were going in and the crowd got behind me and lifted me - they won it for me tonight."
Taylor was delighted to become the first recipient of the Sid Waddell Trophy, named in honour of the popular darts commentator who died last year.
"Sid was like a father figure to me - he was my biggest fan, Sid was. I loved him to bits. I am absolutely over the moon. I can't explain how I feel. It's the biggest night of my life," he added.
Taylor hinted ahead of the match that he was toying with the idea of retirement, but indicated that he is ready to continue and bid for a 17th title next year.
He said: "I'm 53 next year and I'm coming back to defend a world title. It's ridiculous really."
Taylor came into the final under something of a cloud after his spat with Van Barneveld at the end of their semi-final, and added: "What went on two nights before was shocking. Barney did pull me about a little bit and I got loads of stick for it, and I came here tonight and I just tried. What could I do? I just tried my best."
Beaten finalist Van Gerwen paid tribute to the new 16-time world champion, saying: "Phil played great tonight. It was a tough game for me. Phil was awesome.
"I want to say thanks to the crowd and everyone who helped me along."