The 19-year-old McKeown finishes the race at record 57.45 seconds at the South Australian Aquatic Centre to improve on the previous mark of 57.57 set by American Regan Smith in 2019.
Teenager Kaylee McKeown smashed the women's 100m backstroke world record, touching in 57.45sec at the Australian Olympic trials in Adelaide, dedicating it to her father who died last year.
The 19-year-old, who has been in blistering form this year, swam a sensational race on Sunday to sweep past American rival Regan Smith's all-time mark of 57.57, set at the 2019 world championships.
McKeown turned in 28.10 and was never under threat as she powered to the finish.
Veteran Emily Seebohm hit the wall second in 58.59 to also book her place in Tokyo in what will be her fourth Olympics.
"I just can't believe it. I just wanted to come in tonight and blow out the cobwebs," McKeown said poolside in Adelaide with tears in her eyes.
"It's been a huge year for me and my family. It's been 10 months since my dad passed today. So with that behind me and doing that I think he would be very proud."
McKeown, whose father died last year from brain cancer, is shaping up to be a serious multiple gold medal contender in Japan.
She is also expected to qualify in the 200m backstroke, having recently set the fourth quickest time in history, and the 200m individual medley, where she owns the world's best time this season.
Australia won ten medals in the pool at the 2016 Games in Rio, matching their feat from London four years earlier, but well down on the 20 they clinched in Beijing in 2008.