Phelps, who stayed on course for a record eight medals at Athens, took charge on the opening butterfly leg and was never seriously challenged as he swept home in an Olympic record one minute 57.14 seconds.
Ryan Lochte came through on the concluding freestyle leg to complete an American one-two, surging through from fifth place at the breaststroke to freestyle turn to snatch the silver from Trinidad's George Bovell by just 0.02 seconds.
Lochte, who shared gold with Phelps in Tuesday's 4x200 freestyle relay, clocked 1:58.78 and Bovell 1:58.80, with Hungary's Laszlo Cseh -- the 400 individual medley bronze medallist -- just adrift at 1:58.84.
Brazil's Thiago Pereira was in medal position until the freestyle when he dropped to fifth.
Phelps had opened another busy day by qualifying comfortably for the 100 metres butterfly semi-finals, winning his heat in the third-fastest aggregate time. He had the semi-final to come before the evening was out.
Phelps had already won gold in the 400 individual medley, 200 butterfly and 4x200 freestyle relay and bronze in the 4x100 freestyle relay and 200 freestyle.
