Davis, whose victory in 2006 made him the first black athlete to win an individual Winter Games medal, won with a time of one minute 8.94 seconds.
The American, skating in the last pair, shaved 18 hundredths off the target set by Mo Tae-bum of South Korea.
Mo, who won Monday’s 500 meters title, finished second in 1:09.12 ahead of American Chad Hedrick, 32, who took the bronze in 1:09.32.
World champion and world record holder Davis rejoiced by thrusting both arms in the air after crossing the finish line. He high-fived some members of the U.S. squad and then held his fingers up to indicate who was number one.
Later in his victory lap, he shed tears of joy as he embraced a team mate.
The medals for Davis and Hedrick, who had feuded during the Turin Games, were the first for the Americans so far in the Vancouver speedskating competition.
Hedrick won three medals in Turin, including 5,000 meters gold.
Mo’s silver continued a brilliant showing for the Koreans, who have two silvers and two golds over the first five events.
