The Commonwealth 50m breaststroke title was the only major medal Peaty hadn't won in his illustrious career, but he was back to his best to touch home first in 26.76 seconds.
Australia's Sam Williamson was second, while Scotland's Ross Murdoch took bronze.
Peaty's eight-year unbeaten run in the 100m distance ended on Sunday and he reflected he had expected too much of himself on his comeback from a broken foot he suffered in a training accident 10 weeks ago.
But he warned his rivals he was like a cornered lion ready to "bite" back and he did.
While Peaty said it was "heartbreaking" after finishing fourth in the 100m final, he came in for criticism after later suggesting he was "not bothered" about these Games and that his main focus was on the Paris Olympics in two years' time.
Peaty told BBC Sport: "I'm a much happier man. I had two options this morning, I either fight or I don't. If anyone knows me, I fight.
"That means so much. I lost my spark at the start of the week and to have it back now, this is what it's about.
"There were a lot of emotions yesterday but a lot of people have got to understand that I reached the bottom of the bottom yesterday and to bring myself up with the crowd in my own mind and that is the result.
"That was the only one I haven't won in my career, the Commonwealth 50m and I can retire now. I don't care about the stats, tonight was about racing, who was going to get on the wall first.
"No one can really get up to the rate I get to but without the training it goes nowhere. I am looking forward to resetting and having a winter because I haven't done that since 2019.
"I am so glad I got that loss earlier in the week because these wins feel so much more alive and so much better."