The 24-year-old German clinched only the second podium finish of his career with a storming run down the infamous Streif course in front of the 45,000-strong crowd intent on turning the pretty Austrian resort into a carnival for this iconic weekend of ski racing.
The Kitzbuhel track is notoriously difficult with huge jumps, such as the 80-meter Mausefalle not long after the steep start section, and fast, bumpy, technical sections such as the Steilhang.
High-speed crashes have been a notable feature of the race over the years.
"The most important victory for a downhiller is Kitzbuhel because in my opinion it's the most complete race," Austrian legend Franz Klammer, the 1976 Olympic downhill champion, told CNN Sport.
"It requires everything: guts, making tight turns, long turns, gliding sections and jumping."
Dressen, who was the 19th racer to go on a clear day after the storms of earlier in the week, clocked a time of one minute 56.15 seconds to edge out leader Swiss Beat Feuz, winner of last week's downhill in Wengen, by .20 seconds.
The excited German pumped his arms and then skis in the air before sinking to his haunches and shaking his head at what he had just achieved.
"It's just an unbelievable feeling because it was really a surprise to me that I was in the lead as I crossed the finish line and I had to look at the timing board twice to believe it," Dressen told reporters afterwards.
"But then when I recognized that it was a really good one today I was just overwhelmed and rally happy about it."
Dressen made his debut on the World Cup circuit in 2015 and claimed his first podium -- a third -- in the Beaver Creek downhill in December.
He became the first skier to win his debut World Cup race at Kitzbhuel since Didier Cuche in 1998. The Swiss went on to win the iconic Hahnenkamm downhill a record five times.
He is also the first German to win the Kitzbuhel downhill since Sepp Ferstl (representing West Germany) in 1978 and 1979.
Austrian Hannes Reichelt, the 2014 winner, gave the raucous home fans something to cheer about with third place in 1:56.56.
Svindal wins super-G
Norway's Aksel Lund Svindal, who won Friday's super-G over a shortened course because of bad weather, finished eighth in the downhill on the full Streif strack.
The 35-year-old, one of the most successful racers in skiing speed disciplines over the last decade, was racing at Kitzbuhel for the first time since a season-ending crash on the Hahnenkamm in 2016.
Svindal, who has won two downhills so far this season and was second behind Feuz in Wengen, won the super-G from friend and countryman Kjetil Jansrud with Olympic downhill champion Matthias Mayer third and Reichelt fourth.
Frenchman Johan Clarey, who holds the record for the fastest speed registered in a World Cup race with 100.6 mph on the Lauberhorn in Wengen in 2013, suffered the downhill's most notable crash Saturday but was able to walk away unscathed.
The men's speed circuit heads to Germany for next week's race in Garmisch-Partenkirchen.
Norwegian downs Hirscher
Norway's Henrik Kristoffersen finally got the better of World Cup leader Marcel Hirscher with victory over the Austrian in the Kitzbuhel slalom Sunday.
Kristoffersen has had to settle for six podium spots in slalom this season, while six-time overall World Cup champion Hirscher has bagged five wins, plus three in giant slalom.
But over two runs on a snowy Ganslernhang course, the 23-year-old Kristoffersen turned the tables to clinch his 16th World Cup victory and first since January 2017.
Kristoffersen won bronze in the slalom at the Sochi Winter Games in 2014 to become the youngest male medalist in Olympic alpine skiing.
Hirscher took silver four years ago behind countryman Mario Matt, who became the oldest champion in Olympic skiing at 34 and has since retired, although his brother Michael, 24, is making a name for himself with three podiums this season.
The Winter Olympics begin in PyeongChang, South Korea on February 9.