The 36-year-old Federer, fresh from a ideal straight-sets run into 2018's final, looked at his unbelievable best as he wrapped up the tournament against the Croatian 6-2 6-7 6-3 3-6 6-1 in three hours and three minutes.
Having qualified for an astonishing 30th grand slam final, Federer admitted that nerves had got the better of him during a scorching hot day as he waited to take his place for the evening match. "I think it's too far", he told a news conference. After Margret Court, she became the second women to win 20 Grand Slam titles for which she played 48 Grand Slam tournaments.
"For me, I think Roger Federer is certainly the greatest player that has come along".
"It's been a long time waiting for this final".
15 years since lifting his maiden Grand Slam trophy at the hallowed grounds of Wimbledon, Roger Federer took his Grand Slam tally count to 20.
"I'm so happy. It's unbelievable", Federer said after the match.
Federer is the oldest man to win a major since Rosewall, aged 37 years and two days, won the 1972 Australian Open.
"After the year I had last year, it's incredible".
He had to save two break points in an epic service game at the start of the fifth set before riding the momentum home as Cilic's power game wavered.
But 29-year-old Cilic drew level at 3-3 and five games in a row handed him the fourth set to ensure a dramatic conclusion.
While winning tournaments is Federer's priority, he could soon return to the World No.1 spot which he last occupied in October 2012.
The win means Federer now has six Australian Open titles.
86-2: Federer's record at the Australian Open in matches in which he won the first set, the only losses coming against Marat Safin (2005) and Nadal (2012). Despite his strong serve, Federer was applying some pressure, one of Cilic's service games lasted almost ten minutes but still he held firm.
Federer, 36, extended his record for Major championships among men with the win; Rafael Nadal is next with 16.
Cilic looked like he might have missed his opportunity when he netted a weak backhand on set point at 5-4 but he made up for it with a terrific tie-break, his improvement in the match demonstrated by the rock solid smash that clinched it.