Hirscher moved past American rival Ted Ligety into second place in the overall standings. Ligety, who has dominated in giant slalom this season, finished ninth.
Under the lights, with thousands of fans lining the course, Hirscher skied the two runs in 1 minute, 42.50 seconds. He was followed by Felix Neureuther of Germany and Naoki Yuasa of Japan.
The race was delayed for about 15 minutes during the first run. After the first eight starters, a 70-year-old gatekeeper became ill. Organizers say he had a history of heart problems and medical personnel attempted to resuscitate him for about an hour.
He was identified as a ski instructor in Madonna di Campiglio, but his name was not released because his family could not immediately be notified.
He was positioned midway down the course. Gatekeepers make sure racers go around each gate correctly. They are usually assigned two or three gates in slaloms.
Neureuther finished 1.67 seconds behind and Yuasa was 2.28 back. Yuasa put down a blistering second run to move up from 26th after the first leg. It was his first podium finish in his ninth season on the circuit. He had trouble walking after he finished because of back pain.
"He's a real fighter," Hirscher said.
Until Hirscher and Neureuther skied last in the second run, racer after racer failed to match Yuasa on the bottom section of the Canalone Miramonti course. While the course was firm and icy, large ruts that built up after each skier came down made it difficult for racers to maintain balance.
But Hirscher attacked all the way and vastly improved on his 0.06 advantage from the opening leg. Then, exhausted, he slammed into the padding in the finish area.
"I risked a lot and also was very lucky. It was really tough today," Hirscher said. "When you have the right setup, it's really cool here. It was so cool."
Yuasa said he was in agony because of his back.
"It was so bad that I can't recall my last six gates," he said. "I still can't believe all that happened today—nobody believed I could ski like this with the pain. ... But this is my job and as long as I can make my way until the bottom of a course I will try to ski and do my best."
The race marked the World Cup's return to Madonna Di Campiglio after a seven-year break. Fans lined most of the course and despite temperatures below freezing there was a festive atmosphere, with the finish area nearly in the center of town.
Ligety hasn't reached the podium in slalom in five seasons.
"Wow Marcel Hirscher's second run was nasty!" Ligety tweeted, adding it's a "season of race blow outs" —all three of his GS wins have also come with massive margins of victory.
On the speed side, Aksel Lund Svindal of Norway has been dominating.
Svindal, who does not excel in slalom and did not race, still leads the overall with 614 points. Hirscher is next with 560 and Ligety has 537.
Hirscher also took the lead in the slalom standings, with previous leader Andre Myhrer of Sweden placing fourth.
It was Hirscher's second win this season, having also taken a giant slalom in Val d'Isere, France, last weekend—and he's now been in the podium in all seven technical races this season. It was his 14th career win.
Olympic champion Giuliano Razzoli of Italy was on course for a top-three finish when he lost his right ski and fell only a few gates from the finish during the second leg.
Alexis Pinturault, the Frenchman who won the last slalom on home snow in Val d'Isere, straddled a gate and did not finish.
Among those in attendance was three-time winner Alberto Tomba. After a break for Christmas, the men's circuit resumes with a downhill in Bormio, Italy, on Dec. 29.