Jacoby, 17, surprised everyone by finishing ahead of South Africa's Tatjana Schoenmaker and the United States' defending gold medalist, Lilly King. Schoenmaker took the silver. And King captured bronze, her first defeat in a 100-meter breaststroke final since December 2016.
"I was definitely racing for a medal. I knew I had it in me," Jacoby said. "I wasn't really expecting a gold medal, so when I looked up and saw the scoreboard, it was insane."
As she touched the wall and glanced up, Jacoby appeared stunned. King swam over, holding her hands and slapping the water in joy.
Jacoby became one of the youngest American swimmers to win an Olympic gold medal, joining elite company. The only younger U.S. swimmers to collect an individual gold in the past 20 years were Katie Ledecky and Missy Franklin.
Jacoby, who is from Seward, Alaska, moved to Anchorage earlier this year to train. Her community watched live from Seward, jumping and screaming in joy as No. 1 displayed against her name in the pool.
"A lot of big-name swimmers come from big, powerhouse clubs,'' Jacoby said. "Me coming from a small club, in a state with such a small population, really shows everyone that you can do it no matter where you're from.''
Jacoby's winning time was 1 minute, 4.95 seconds. Schoenmaker came in next at 1:05.22, while King finished in 1:05.54.
"I'm so excited for Lydia," King said. "I love to see the future of American breaststroke coming up like this and to have somebody to go at it head-to-head in the country.
"I definitely knew she was a threat and saw a lot of myself in her effort."
Jacoby is the first Olympic swimmer, and only the 10th Olympian, to be born in Alaska.
The Associated Press contributed to this report.