It is New Zealand's sixth medal at a world championships.
Boyle joins the ranks of Danyon Loader (three medals in 1994), Anthony Mosse (1986) and Gary Hurring (1978) with her achievement.
"I am so happy," she said. "I didn't really know where I was. I've raced the Spanish girl [Schmid] a few times and know she's an absolute animal head-to-head. I thought I'd feed off her energy and I had the Olympic champion [Camille Muffat] on the other side. I was surprised to be ahead of her.
"On the last lap I was like 'oh my God, I'm just going for it'."
Boyle beamed on the podium as she was presented with her medal, a wreath and what looked like a frozen turkey but was actually the event mascot.
She said it had been a trying year after being disappointed to lose the services of her coach Mark Regan early on.
"I did a lot of different things which I didn't necessarily choose but it was important to be confident in myself the entire time. I've had lots of different coaches and I've picked the best out of each experience."
Boyle says she has felt the pressure of being New Zealand's only realistic medal hope for some time.
"Yeah I did feel it. I especially wanted to improve my results from London. I'm so happy to be on the podium at a pinnacle event. It's such an honour. I mean, I'm nowhere near what Danyon Loader achieved overall but to be on the same kind of stage [at world championship level] is fantastic. It's taken a long time. It's nice to finally be there."
Boyle was conscious of finishing slower in the final than in her heat, as happened at the Olympics.
"This morning I went out fast and I really hurt in the last 200m. I didn't want to do that tonight but didn't want to be too careful either. My last 50m must have been good."
Luis Villanueva began as high performance director in January. He agreed it was important to see her improve her time in the final.
"She couldn't do that last year in London and she did it this time so we are very happy. We made changes but I don't think this result is due to those necessarily. A lot of people worked in the past at this. Mark Regan trained Lauren for a long time and we've just been trying to improve her results at pinnacle events."
The result will have done wonders for the sport's confidence given Swimming New Zealand is on a post-Olympic trial with $1.4 million added to the governing body's high performance budget (a drop from the $1.65 million received each year of the previous Games cycle). The sport's 'targeted' status was removed with a lack of medals over four Olympiads.
Boyle further helped restore the sport's reputation at December's short-course (25m pool) world championships in Turkey by claiming gold in the 800m freestyle (New Zealand's first since Moss Burmester in the 200m butterfly in 2008) and bronze in the 400m.
Boyle is also expected to compete strongly in her favoured event, the 800m freestyle later in the meet. She finished fourth at the Olympic Games over that distance. She races the non-Olympic 1500m tomorrow.
Of the other New Zealanders, Glenn Snyders was unable to progress to the final of the 100m breaststroke after qualifying fifth fastest for the semifinals.
