The two-time world champion navigated the highly-technical 37.4km course through Wolverhampton superbly to take top spot in 46.21.24.
The much-anticipated pre-race storyline of Dennis v Geraint Thomas failed to materialise after the Welsh Tour de France winner clipped a course marker on a tight turn and took a tumble early in his run.
That slip cost Thomas a crucial 30 seconds that was just too much to make up, but he impressively closed that gap enough to land the bronze medal in 46.49.73.
The Silver medal went to Fred Wright with 46.47.52.
Setting off two hours prior to Dennis, the Englishman put on an impressive display to take the provisional lead before dropping to second.
"I've finally got that top step. It's taken 12 years, since Delhi [2010 Games]. I definitely didn't come close to that top step there but 12 years later I finally got it," Dennis said after.
"I just generally tried to be safe around the corners. I did know there was a couple of corners but some did tighten up a little bit more than I thought they would. So a couple nearly caught me out but I was quickly able to react.
"It's a shame, you never like to see anyone come down. I hope that didn’t actually affect me winning or losing. It would have been nice to have a clean run for everybody and there be no question marks over my gold medal."
England's Dan Bigham was the second-fastest finisher through the first checkpoint, but suffered a heavy crash into a barrier after taking the turn with too much speed.
After changing his bike he was overtaken by Dennis, and ultimately finished down in 12th.
The win will have tasted especially sweet for Tokyo 2020 bronze medallist Dennis, who improves his silver at Glasgow 2014 in this event.
Dennis' win came hot on the heels of his compatriot Grace Brown's victory in the women's time trial.
"The morale and confidence is there, but it also puts a little bit of pressure. So we can't race stupidly. When we've got more pressure and it's obvious we're one of the strongest teams, there is going to be lots of eyes on us, so we have to be quite smart," Dennis said of on Australia's cyclists being favourites for Sunday's road race.
"Being the strongest doesn't always mean you win."
Men's time trial results at Birmingham 2022
1 Rohan Dennis, Australia - 46.21.24
2 Fred Wright, England - 46.47.52
3 Geraint Thomas, Wales - 46.49.73
4 Aaron Gate, New Zealand - 48.43.28
5 Lucas Plapp, Australia - 48.47.70
6 John Archibald, Scotland - 48.54.55
7 Owain Doull, Wales - 49.05.46
8 Darren Rafferty, Norther Ireland - 42.15.16
9 Tom Sexton, New Zealand - 42.26.44
10 Andreas Miltiadis, Cyprus - 42.48.77
How to watch 2022 Commonwealth Games
The Commonwealth Games will be broadcast live in many parts of the world.
UK: BBC TV, BBC iPlayer and BBC website.
Canada: CBC Sports, CBC Sports app
Australia: Channel 7, 7Plus
New Zealand: Sky, TVNZ
India: Sony LIV
_Further TV broadcast and digital live streaming details can be found on the Commonwealth Games website here.