Steadily working his way through the field, the 33-1 shot was sitting a close third as The Last Samuri and Vics Canvas jumped the last together.
The Last Samuri battled on at the elbow but could not quite hold off the strong-finishing Mouse Morris-trained nine-year-old, who was remarkably winning for the first time over fences.
Forging on inside the final 100 yards under 19-year-old David Mullins — on his first ride in the race — the Gigginstown House Stud-owned gelding eventually crossed the line six lengths ahead of 8-1 joint-favourite The Last Samuri.
Vics Canvas was third at 100-1 and Gilgamboa (28-1) fourth.
Mullins said: “It’s unbelievable. I just couldn’t expect things to have gone better.
“There was one little mishap at the fourth-last, but thank god I came out (the other side). Everything went to plan really.
“Credit to Mouse, he’s produced this horse without having won over fences.
“Then there’s me, who’s never even walked around the Grand National track.
“Mouse is a genius and he’s the best man in the world for preparing a horse for one day.
“I’m very thankful to Michael and Eddie O’Leary (of Gigginstown) for giving me the chance.
“That’s the best ride I’ve ever got off a horse and it’s the best feeling to come back into a place like this.
“It was just brilliant.”
Morris was almost lost for words after the race, but paid tribute to his late son, Christopher, who tragically died last summer from suspected carbon monoxide poisoning while travelling in South America.
Having also won the Irish National on Easter Monday with Rogue Angel, Morris said: “I don’t know what to say. To have the two in a couple of weeks is unbelievable. I’ve a lad who’s doing overtime for me up above.
“He (Rule The World) wasn’t badly named, was he?”
As ever the race was not short of drama with the well-fancied Holywell parting company with Richie McLernon at the second fence, while dual King George winner Silviniaco Conti was pulled up.
Last year’s winner Many Clouds travelled well for much of the way after having sat prominently before making a bad mistake which ultimately cost him a repeat chance of victory.
Although only 16 of the 39 runners that set out managed to get round, all 40 horses returned safely.
Morris has never made any secret of the regard in which he holds Rule The World, who has suffered his fair share of injury problems.
He said: “It’s Disneyland - fairytale stuff.
“He’s fractured his pelvis twice. Before that I always thought he was the best horse I ever had, how good would he be with a proper rear end on him?
“He had a nice weight and he’s a class horse on his day. I know he was a maiden (over fences), but he’s been running good races — Grade One races — and banging on the door.
“This is next best to the Gold Cup (won with War Of Attrition in 2006).”
Gigginstown supremo Michael O’Leary also won the Gold Cup at Cheltenham last month with Don Cossack and said: “This is the cream on top.
“I don’t know what to feel, I’m numb. I thought I had no chance in it, I wanted to win a Gold Cup and it was beyond dreams that I could win a Grand National.
“To win a Gold Cup, Irish National and Grand National in one year - I think I should stop, it’s not going to get any better than this.”
A proud Kim Bailey said of The Last Samuri: “Nothing is over until they cross the line, the horse tried his heart out and he jumped for fun.
“It’s the longest run-in you can possibly imagine. I was standing here screaming - my voice has gone.
“We’ve beaten the third horse, but another horse has come on the outside from nowhere.
“I’m just so proud. We’ll do it all over again next year 12lb worse off.”
Owner Paul Rooney said: “He’s only a baby at seven years old, next year is his year.
“This is his trial run and we’re very confident about next year.”
Vics Canvas ran a fantastic race to finish third after making a shuddering mistake jumping Becher’s Brook the first time.
Trainer Dermot McLoughlin said: “It was unbelievable how Robbie (Dunne) came back from that mistake at Becher’s. They must have lost 20 lengths, the horse tried so hard and it was a great run. Robbie was understandably very disappointed afterwards.
“It was the first time he’d had a low weight like 10st 6lb on his back. He’s much better with a light weight so we were quite hopeful beforehand.”