The 21-year-old Liu also became the first Chinese man to win an Olympic track and field title with a remarkable performance.
Terrence Trammell of the United States took silver, as he did at the 2000 Olympics and last year's world championships, in 13.18, with 2000 Olympic champion Anier Garcia of Cuba third in 13.20.
Liu's personal best going into the race was 13.06. His time was the first world record on the track at the Athens Games, and one of the least expected.
Liu matched the mark set 11 years ago by Briton Colin Jackson in Stuttgart, Germany.
He led almost from the start and while others floundered the Chinese maintained his rhythm and screamed in delighted disbelief as he flashed over the line.
