The 37-year-old Cuche, who also won in Lake Louise two years ago, clocked one minute, 47.28 seconds to edge Swiss compatriot Beat Feuz who finished in 1:47.34. Austria's Hannes Reichelt finished third in 1:47.36.
"I had to laugh when I saw the green light for me in the finish because I had trouble in both training runs so I was not on the list as one of the favourites," Cuche said.
It marked the 18th career World Cup victory and 10th downhill win for the Swiss speed specialist Cuche, who at 37 years, three months holds the record as the oldest winner in history of a World Cup race.
Rising star Feuz's only win on the World Cup circuit came in the downhill at Kvitfjell, Norway, last year. The 24-year-old also skied well in both training runs this week, finishing 10th in Friday's final training run.
"He (Cuche) is a ski legend so to be behind him gives a sweeter taste to my second place finish," Feuz said.
Starting from the 45th position Saturday, Reichelt skied his way into third place, bumping Austrian compatriot Romed Baumann off the podium.
Baumann finished fourth in 1:47.63 and Klaus Kröll was fifth in 1:47.75 as three Austrians placed in the top five.
"My training was going very good so I had a lot of confidence," Reichelt said.
Cuche placed a disappointing 32nd in the final training run Friday, saying that strong winds pushed him off his track and resulted in him finishing more than two seconds back of the leader.
But Cuche was able to take advantage of a break in the weather on race day as a steady snowfall gave way to a brief period of sunshine as he started his charge down the course.
Cuche celebrated at the finish line with his signature move, kicking his right ski off and then catching it in mid-air.
"It was strange to win after those two training runs. I was lucky that I got good weather with no wind. Usually at Lake Louise you have to be lucky with the weather and today I was," Cuche said.
After his poor results in the training runs, Cuche said he made some adjustments to his equipment.
"I made a lot of changes to my skis and boots to make them less aggressive," he said.
Adrien Theaux, who was the fastest in Friday's training, finished tied for sixth at 1:47.91. American Bode Miller was ninth with a time of 1:48.01. Last year's World Cup overall champ Ivica Kostelic of Croatia finished tied for 39th.