Khelif, 25, claimed a unanimous points decision win over China's Yang Liu in the women's 66kg final for her first Olympic medal.
"I'm very happy. For eight years this has been my dream and I'm now the Olympic champion and gold medallist," said Khelif.
"I've worked for eight years, no sleep, eight years tired. Now I'm Olympic champion."
Khelif, along with Taiwan's Lin Yu-ting, who fights for gold on Saturday, was disqualified from last year's world championships after failing gender eligibility testing.
The International Olympic Committee (IOC), which runs the sport in Paris, however, insist the two fighters were born and raised as women, and have passports saying that.
"I want to thank all the people who have come to support me," said Khelif, after the final at Roland Garros, the home of French tennis.
"All the people from Algeria and all the people at my base. I want to thank all the team, my coach. Thank you so much."