Murray gave a masterclass to beat the big-serving Canadian 6-4 7-6 (7/3) 7-6 (7/2) and clinch his third grand slam title in his 11th final.
The 29-year-old’s success came in his first final back with coach Ivan Lendl since his 2013 Wimbledon success and maintained the dominance of tennis’ big four.
At the moment of victory, Murray dropped his racket to the Centre Court grass before leaping in the air in celebration of another piece of British sporting history.
Clutching the trophy to his chest, he told Sue Barker on BBC: “This is obviously the most important tournament for me every year. I’ve had some great moments here and some tough losses and the wins feel extra special because of that.
“I’m proud to get my hands on the trophy again. I played really good stuff today but Milos has had some great matches on the grass.”
Murray thanked his team, and his voice cracked as he addressed wife Kim and his parents: “And to my family as well, I love all of you.”
Murray even included Prime Minister David Cameron, watching with the Duke and Duchess of Cambridge from the Royal Box, in his speech, drawing some good-natured jeers from the crowd.
“I think playing in a Wimbledon final’s tough, I certainly wouldn’t like to be the prime minister, it’s an impossible job,” said Murray.
Raonic vowed to be back, saying: “It’s a difficult challenge as it is and Andy’s been playing great. He deserves to be winning here for a second time. This one’s going to sting so I’m going to make sure as these courts are green that I do everything I can to be back here for another chance.”
For the third time in his career, Murray walked out to a wall of Centre Court noise on finals day. For his opponent, of course, this was all new.
The key question was how Raonic would handle the occasion, and Murray pointedly kept him waiting, but there were no real signs of nerves as Raonic immediately hit 139mph with his big weapon.
The Canadian said after losing to Murray in the final at Queen’s Club three weeks ago that he would serve through him next time, but it was not panning out like that.
Murray was dialled in straight away on the return and Raonic, who had lost only five service games in the tournament, found himself under near constant pressure.
He saved a break point in the third game, which was saved, but when two more arrived four games later, Murray pounced. Raonic for once was tentative on his approach shot and netted a forehand volley.
It was almost deja vu as Murray pulled off a series of trademark dipping passing shots to force a break point in the seventh game of the second set, but he missed one at the crucial moment and Raonic escaped.
The Canadian must have shaken his head in disbelief in his next service game when Murray not only returned a 147mph serve, the equal second fastest ever at Wimbledon, but won the point.
However, the Scot was falling short when it came to taking his hard-won chances and two more break points went begging.
Murray would have hoped to avoid tie-breaks, having lost four of his previous five against Raonic, but this would be different.
The world number two won the first three points and then moved 4-1 and two mini-breaks ahead with some staggering defence, even by his standards, followed by a forehand winner. It was a hammer blow to Raonic; a second serve onto the line clinched the set.
No man had come back from two sets to love down to win Wimbledon since 1927, while Murray’s only career loss after winning the first two sets was on his first trip to the All England Club in 2005.
Even when Raonic did create an opening, bringing up his first two break points at 2-2 in the third, it was ultimately still a disheartening moment as Murray saved them both, the Scot determined not to offer his opponent any encouragement.
Murray has been supremely focused throughout the tournament under the emotionless gaze of Lendl, and this performance was the ultimate validation of his decision to rehire the eight-time grand slam champion.
Raonic kept an expectant Centre Court crowd at bay to force another tie-break, but Murray was not about to be denied. He was utterly ruthless in winning the first five points, and at 6-1 he had five championship points. He needed only two, clinching victory when Raonic netted a backhand.