Defar won in 9 minutes, 10.47 seconds, lowering the mark of 9:11.97 set by American Regina Jacobs in 1999.
The crowd at Home Depot Center roared as the 23-year-old runner cruised toward the finish line, leaving her rivals far behind.
Defar grabbed the green, gold and red Ethiopian flag and jogged around the track, stopping to greet well-wishers.
Defar won a gold medal in the 5,000 meters at the 2004 Athens Olympics and Sunday's effort was her fourth world mark.
Russia and Iran play in tandem to raise oil prices, while the tandem of the United States and Saudi Arabia has a goal to cause oil prices to collapse