Ireland's Cian O'Connor and Dutch rider Gerco Schroder faced a jump off to determine the silver and bronze medals after finishing tied with one time fault apiece.
Schroder took second place, posting a clear round with O'Connor, claiming his country's first medal at London 2012, finishing third after his mount,
Blue Loyd 12, knocked a pole off the last fence.
The 30-year-old Guerdat, bronze team medallist in Beijing four years ago, took the title as the only rider to register two faultless rounds.
This was the first time individual jumping gold had been won by a Swiss rider since the 1924 Paris Olympics.
"I knew I had a horse that could jump everything and that if I rode clear I could be Olympic champion," said Guerdat, who cited Swiss tennis great Roger
Federer as an inspiration.
He added: "I love what I do, I don't do it for this, I just love riding, but this (winning gold) becomes part of it if I do a good job."
O'Connor had won gold in Athens in 2004 only to be subsequently disqualified when his horse tested positive for a banned substance.
A late call up to the Irish team, he only got in to Wednesday's final after Swedish world number one Rolf-Goran Bengtsson withdrew as his horse Cassall
was deemed unfit to compete.
"I told my wife last night I'd be riding today, and she laughed at me," O'Connor said.
"I didn't realise I was winning Ireland's first medal."
"Coming off Athens it was great to be able to deliver here, it's a proud day for me to be able to give something back to the Irish public."
Great Britain's hopes of winning gold for the first time were scuppered when Nick Skelton on Big Star picked up four faults to finish in a tie for fifth with fellow Briton Scott Brash and Mexican Alberto Michan.
Guerdat and Skelton were among a group of only six riders to go clear in the first round of the two-legged final.
And with the Swiss posting a second faultless display the pressure was on last man out Skelton to force the equestrian equivalent of a penalty shoot-out.
The evergreen 54-year-old and Big Star hadn't put a foot wrong in London, but with one pole down the pair failed in their bid to double up after claiming gold in Monday's team competition.
"It's just one of those things, Big Star hadn't touched a jump all week," said Skelton.
He added: "Everyone thought it was going well, I did too, but I just touched the pole at the wrong time and that was it.
"I feel sorry for the people that came today. We expected to win and it wasn't to be. But we got one gold, we would have settled for that before we
Saudi Arabia's Kamal Bahamdan, with a time fault in each round on Noblesse des Tess, came in fourth.
Further back in a tie for ninth on eight faults came Ian Millar, the 65-year-old Canadian who was appearing at a record 10th Olympics.
The previous benchmark of nine Games was held by Austrian sailor Hubert Raudaschl.
Despite his years the bespectacled Millar is looking to the future, and Rio in 2016.
"Star Power wants to go and he cannot go without me," he said referring to his 11-year-old gelding.
Notable names who failed to make it into the second round were Millar's compatriot and defending champion Eric Lamaze, and France's European champion Kevin Staut, who picked up 18 faults in an error-strewn display on Silvana.
Another to fall by the wayside was Saudi Arabia's Prince Abdullah al-Saud, King Abdullah's grandson.