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The 20-year-old County Down swimmer clocked one minute 04.05 seconds to beat the previous record of 1:04.53 she set in the heats earlier in the day.
Firth was 2.28 seconds ahead of Dutch woman Marlou Van der Kulk as she repeated her London 2012 triumph.
The Northern Irishwoman's British team-mate Jessica-Jane Applegate won bronze.
"It feels amazing. I'm just so happy," said Firth after her triumph.
"I've had a lot of setbacks in the last four years, breaking my wrist. I'm so glad to have retained my title."
Firth will be back in action on Sunday in another of her strongest events, the 200m freestyle, while she will also compete in the 100m breaststroke and 200m individual medley later in the Games.
As a 16-year-old, Firth clinched gold for Ireland in London and went on to win three silver medals at the IPC World Championships in Montreal a year later before opting to switch allegiance to Great Britain.
She subsequently had to sit out the 2015 World Championship after suffering the wrist injury.
The Northern Irishwoman competes in the S14 classes, for competitors with an intellectual disability, and she raced in eight events at the 2014 Commonwealth Games in Glasgow.
Firth set a new world record for the S14 200m freestyle at the Scottish National Championships in Glasgow in June.
Bethany Firth set a new world record time in retaining the S14 100m backstroke title at the Paralympic Games in Rio on Thursday.