Phelps broke the record previously held by American swimmer Mark Spitz, who won seven gold medals in 1972.The US won in a world record time of 3:29.34, beating their own world record from 2004 by 1.34 seconds. Silver went to Australia in 3:30.04, who were also under the old best mark, while Japan took bronze in 3:31.18.
It was the 25th world record broken in the Beijing Water Cube at the Olympics and came in the final swim of the swimming competition.
Phelps finally cracked on Sunday when he was presented with a certificate to show that he had won an unprecedented eight gold medals at the Beijing Olympics.
The rousing applause he received from the 11,000 spectators in the Beijing Water Cube brought more tears to his eyes and it was only when the US flag was raised and the national anthem played that Phelps composed himself and broke into a broad smile.