With that, figure-skating favorites Cohen of the U.S. and Irina Slutskaya of Russia proved the also-rans in the eagerly anticipated ladies' long program.
Arakawa proved so elegant and near perfect that two-time Olympic winner Katarina Witt was standing and applauding before the Japanese skater had finished.
Cohen finished with a silver, while Slutskaya and took bronze (she fell once).
Arakawa, 24, became the first Japanese Olympic gold medalist in figure skating and just the second with any medal; Midori Ito, one of Arakawa's idols, won silver behind Kristi Yamaguchi in 1992. Ito led the cheers of the flag-waving Japanese in the crowd, the Associated Press reports.
Emily Hughes, Sarah's 17-year-old sister, fell on a triple loop and shortened another jump, but her seventh-place finish was considered remarkable for a newcomer.
"I am really excited about what happened, this being my first Olympics and my first big international. I am taking away a lot from this competition," said Hughes, who replaced the injured Michelle Kwan and arrived in Turin just a week before the free skate.