The result was another in a series of surprises that have produced a bizarre race for the NCAA title, following losses last weekend by then-unbeaten Nebraska and defending national champion Oklahoma.
The Volunteers ended decades of frustration at Florida Field, clinching the Southeastern Conference East Division title and a berth in the Southeastern Conference title game next weekend.
Tennessee (10-1, 7-1) had dropped its last seven meetings in Gainesville and won here for the first time since 1971. Stephens did much of the work, scoring on runs of six yards in the first quarter and 35 yards in the third.
Stephens also had a 69-yard run, breaking several tackles on a jaunt that led to a one-yard touchdown by Zack Davis that gave the Volunteers a 34-26 lead with 8:30 left.
Florida (9-2, 6-2) moved to within two points when Rex Grossman threw a two-yard pass to Carlos Perez with 1:10 left. But Grossman could not find an open receiver on the conversion try and his pass fell incomplete.
The loss ended the national title hopes of the Gators, who had taken control of their destiny thanks to the losses by Nebraska and Oklahoma.
Tennessee is very much in the championship picture. The Volunteers went into weekend as the No. 6 team in the Bowl Championship Series rankings, but there were forecasts by those who study the computer ratings that Tennessee could vault all the way to second with a win over Florida. Tennessee's strength of schedule number will improve dramatically with Florida having been added into the computation.
Tennessee likely drew added satisfaction by ending the title hopes of Florida coach Steve Spurrier, who in past years had referred to the Volunteers as "Citrus Bowl champions" due to the Gators' success in the series.
The Gators have been a source of constant frustration for coach Phillip Fulmer, who won for just the second time in nine meetings with Florida.
Grossman made his final pitch to become the first sophomore to win the Heisman Trophy by completing 33 of 51 passes for 362 yards with one interception.
Reche Caldwell caught eight passes for 115 yard while teammate Jabar Gaffney also went over the century mark with seven catches for 101 yards.
But the Gators were unable to establish a running game in the absence of Earnest Graham, who was out with a sprained knee suffered against Florida State two weeks ago. His replacement, Robert Gillespie, has nine rushes for 21 yards and the Gators had 36 rushing yards overall.
This season's game was pushed back from Sept. 15 following the terrorist attacks.
The Volunteers took the lead for good in the seesaw affair early in the fourth quarter with the help of a 34-yard run by Stephens and Davis later followed with a two-yard touchdown run.
But the Volunteers botched a two-point conversion attempt when the snap hit Donte' Stallworth, who was in motion across the line of scrimmage, keeping the score at 27-23 with 13:09 left.
Florida made it a one-point game when Jeff Chandler kicked a 52-yard field goal.
Tennessee built an early 14-0 lead before Florida did all the scoring in the second quarter to take a 20-14 lead at intermission.
Tennessee came out with an effective ball-control offense, taking seven minutes off the clock on a 14-play, 66-yard drive that ended with a two-yard touchdown pass from Casey Clausen to Troy Fleming.
Grossman soon had a tipped pass intercepted by cornerback Jabari Greer near midfield and the Volunteers capitalized on Stephens' first touchdown run. Clausen was 17 of 25 for 168 yards with Bobby Graham catching seven of the balls for 71 yards.
But Grossman did not lose his poise, completing a 40-yard pass to Caldwell that set up a one-yard quarterback sneak for a score.
The Volunteers gave the ball right back when cornerback Guss Scott stripped Jason Witten at the Tennessee 20 and Chandler later followed with a 20-yard field goal.
Turnovers continued to plague the Volunteers as linebacker Mike Nattiel intercepted Clausen and returned it 25 yards to the Tennessee 21. On the next play, Grossman found a wide-open Gaffney in the end zone for a 17-14 lead with 8:51 left in the second quarter. Chandler later added a 35-yard field goal before halftime.
Stephens put the Volunteers back in front 1:56 into the third quarter with a 35-yard touchdown run in which he bounced off Marquand Manuel and raced to the end zone.
Florida took a 23-21 lead after three quarters on a 35-yard field goal by Chandler.