Reichelt covered the bumpy course in 2 minutes, 03.38 seconds to edge Norwegian Aksel Lund-Svindal and third-place Bode Miller of the United States.
"It was a great race," Reichelt said. "It's special for an Austrian to win Kitzbuehel."
Reichelt said he was able to stay on the fastest line down the mountainside and avoided the minor mistakes that cost his competitors valuable fractions of a second.
Miller, a pre-race favorite who finished in 2:03.72, said he caught a little too much air on a key jump. "That mistake is just is just too big of a mistake, especially right there where you're on a flat," he said. "it just cost me way, way too much time."
Svindal's second place padded his lead in the overall men's World Cup standings to 107 points over Austria's Marcel Hirscher.