RadioShack rider Horner, who turns 42 next month, left the sprinters to fight out the 21st and final stage of the three-week Vuelta and finished safely in the bunch to secure the race win 37 seconds ahead of Giro d'Italia champion Vincenzo Nibali. Spain's Alejandro Valverde was third overall.
"This is a muy (very) special moment, muchas gracias (many thanks)" Horner, mixing English and Spanish, told fans after donning the race leader's red jersey for the final time on a sunny evening in central Madrid.
The stage win went to 22-year-old Australian Michael Matthews in a bunch sprint with American Tyler Farrar second and Germany's Niklas Arndt third.
At 41 years 11 months, Horner outstrips the previous oldest Grand Tour winner, Belgian Firmin Lambot who won the 1922 Tour de France, by five years.
The Tour of Spain's previous oldest champion was Swiss Tony Rominger, who was aged 33 in the 1994 race.
Horner had said the Vuelta's mountainous route, with climbs as early as stage two, favoured his racing style and he soon showed his intent with a solo victory in stage three on the uphill finish at the Mirador de Lobeira to briefly hold the race lead.
"I love the course. I thought its design was perfect for me, and when I came here and we did a good opening team time trial (finishing second) then I believed I could take the jersey, though I don't know if I believed I could win it," he told reporters.
Horner landed the first major blow against his rivals when he soared away from the pack at Hazallanas summit finish in southern Spain on stage 10, regaining the overall lead.
Pre-race favourite Nibali ousted him from top spot in stage 11's individual time trial but, as the Italian weakened in the final week of climbing through the Pyrenees and northern Spanish mountains, Horner's consistency allowed him to close the gap.
After taking the overall lead for a third time on stage 19 with a three-second margin over the Nibali, Horner then resisted the 2010 Vuelta champion's multiple attacks on the dauntingly steep slopes of the Alto de L'Angliru on Saturday to tighten his grip on the race.
"I've been a professional for almost 20 years, but Grand Tours have always been in a special place for me," Horner said.
"It's been a long journey to get here, but I have a lifetime of memories with this race."