"It feels super crazy, I definitely didn't think I'd be here in this moment with the gold medal," Lee said in the mixed zone following her win.
An American has now won each of the last five Olympic titles.
Lee's final score was 57.44, which topped Brazil's Rebeca Andrade, who finished with a 57.298. Russian athlete Angelina Melnikova won the bronze.
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Lee, who is 18 and from Minnesota, is the first Hmong American to compete in the Olympics. She is also now the first Asian American woman to win gold in the Olympics’ all-around competition.
Her father said on NBC's "TODAY" show Thursday that he, his wife and the "whole community" were watching together and "holding their breath" as she competed.
"I know she’s excited and happy, and we’re so proud of her," John Lee said.
"We both worked for this. He sacrificed everything to put me in gymnastics" Lee told Hoda Kotb after her win. "Both my parents really have. This is my family's medal, my medal. My coach's medal."
John has previously said that he couldn't afford a balance beam when his daughter was a child, so he built her one in the backyard.
"This has been our dream forever," Lee said Thursday. "I wish he was here. ... It's sad that he can't be here, but this is our dream and this our medal."
John was in the stands watching as she secured her spot for the Tokyo Olympics in June at the Olympic trials.
It was one of the few times he has been able to see his daughter compete in person since he fell off a ladder in 2019 — two days before Lee competed at the U.S. National Gymnastics Championships — becoming paralyzed from the chest down.
She considered skipping the championships, but her father pushed her to continue.
Lee also won silver at the Tokyo Games in the team final Tuesday.
Biles' decision to withdraw from that event and Thursday's in order to focus on her mental health loomed over Tokyo's Ariake Gymnastics Centre as the Olympics continued with one of its leading stars on the sidelines.
Lee noted Thursday that Biles' decision not to compete "was a lot to take in."
"I was coming in to take a silver spot, but I feel like I just kind of went out there and did it for myself," she said. "I didn't really focus on the scoreboard. Wasn't focusing on any of that, because it just wasn't going to be a good competition if I did so, yeah, it's crazy."
Lee was joined in the final by Jade Carey, who took Biles' place, and came in eighth place Thursday.
Lee had the third highest all-around score during the qualifying round behind Biles and Andrade. Carey had the ninth highest score.
While Biles' absence was felt on the floor of the arena, her decision to step back from competing Tuesday to focus on her emotional well-being continued to make an impact across the sports world.
She said on Twitter that “the outpouring love & support I’ve received has made me realize I’m more than my accomplishments and gymnastics which I never truly believed before.
Biles, 24, will “continue to be evaluated daily” to determine whether or not she should participate in next week’s individual event finals, according to a statement from USA Gymnastics.
In a meeting with NBC News reporters, two of Biles' teammates, Grace McCallum and Jordan Chiles, voiced support for their teammate and said they're soldiering on.
"It's been a crazy, crazy ride," said Chiles, noting that they've had to train through a pandemic and they're competing at venues where there's nobody cheering them on because there is a state of emergency in Tokyo and no fans are allowed in the stands.