Britain was behind after the first lap but Pendleton was in a league of her own after taking over from Jessica Varnish and crossed the line in 32.754, slashing 0.074 off the previous record set by the Australian world champions earlier on Friday.
Anna Meares and Kaarle McCulloch had lowered their own world record by clocking 32.828 in the qualifying session and a repeat of the Australians' performance looked likely after the first of two 250-metre laps.
Britain was 0.232 down when Varnish gave way for Pendleton to deliver, and she did just that by riding the final lap in 13.962.
China beat France to take the bronze medal.
Meares and McCulloch, who earlier on Friday predicted the record would be broken, had beaten Pendleton and Varnish to claim the gold medal at last year's world championships.
(Reporting by Julien Pretot; Editing by Pritha Sarkar; To query or comment on this story email email@example.com)