The Bedford runner capped a remarkable year by setting a new women's world best time of two hours, 17 minutes and 18 seconds.
She smashed the old mark of Kenyan Catherine Ndereba, who finished a distant second, by 89 seconds.
Radcliffe led the women's race from start to finish, but admitted a potential late toilet stop nearly scuppered her triumph.
"I went through the first half feeling good and everybody said the second half would be faster," Radcliffe told BBC Sport.
"So I tried to kick on and I felt good. But then I went through a really bad stage between 22 and 23 miles.
"I really needed to go to the toilet and I thought I was going to have to stop. Then it just went off so I was alright. But at that 22-mile point I was thinking, 'Oh no!'"
Radcliffe reached the halfway mark two minutes faster than at the same stage of her debut marathon win in London last April.
And she averaged five minutes and 14 seconds per mile as she stretched away from Ndereba in the closing stages to obliterate the old record.
"I was trying to hold it back during the first half and then kick on a little bit during the second," she said.
"I was running with a group of US guys who were trying to get their time, so that was helping me."
Radcliffe was grateful for the unexpected but vociferous support she received on the Chicago route.
"I was really surprised how much support there was for me out there," she added.
"There were so many British people waving their flags.
"I thought it would be really quiet after London but it wasn't at all. They really got behind me on the course today."
Ndereba, who finished second in 2:19:26, could only watch in admiration as Radcliffe stormed clear in the final miles.
"The course was very good," Ndereba said. "I know she (Radcliffe ) is very strong and has a good kick. I knew she was going to fly."
Victory completed Radcliffe's goals for the year, which have seen her retain her world cross country title, win the London Marathon and claim Commonwealth 5,000m and European 10,000m gold.
"I am definitely having a holiday now," she added. "I am chucking the trainers away until I get home."