Schild's winning time over the two runs was 1min 45.79sec with Zettel second at 0.34sec back and Pietilä-Holmner finishing third at 0.65.
Pietilä Holmner's strong second run proved enough to claim a place on the podium, after having finished the first round trailing in fourth.
"It was either a wipe out or do a great run, that was the choice," she said after the race.
But despite her best efforts, the Swedish skier was left trailing the Austrian pairing.
With five slalom victories already this season on the World Cup circuit, Schild lived up to her billing as pre-race favourite.
The news will be especially welcome for Schild's boyfriend and Austria team-mate Benjamin Raich after the former world slalom champion had surgery on Wednesday having torn his cruciate knee ligament in the team event.
"I still can't believe it at the moment," said an emotional Schild.
"Everything has happened over the past few days, first Benni's injury and today victory.
"Somehow, it doesn't make sense. But I hope Benni's doing better now."
"Lots of thanks to everyone who helped me, especially to Benni. We talked on the phone and he really encouraged me."
"It was a hellish race, it was really difficult and I made many mistakes. It was just fight, fight, fight and that worked, so I'm just overjoyed."
"I think it still needs to sink in."
Olympic and former world slalom champion Maria Riesch, who had won the event two years ago in Val d'Isere, finished fourth at 1.34.
"I tried everything, but the course was hard and I lacked the rhythm and training you need," said Garmisch-resident Riesch, who won bronze in the super-G and downhill at these championships.
"The three girls in front are all slalom specialists, they have had more time to train and to prepare for this race."
"I didn't become a world champion at home, that was my dream, but it is far from being a disaster with two bronze medals, so all-in-all, I am happy."
Schild set the pace with the fastest time in the first leg and was seventh in the second to claim her first major individual title and become Austria's first winner of the women's slalom title since 1993.
Zettel's silver medal was her first major podium finish since she won the super combined title at the 2009 world ski championships.
"It's a dream," said the 24-year-old.
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"I had to pull myself together so the tears don't start flowing. It's so emotional when everyone comes and congratulates you, it's a really good feeling."
It was Austria's 12th and 13th medals of the fortnight-long championships and leaves them top of the table ahead of Sunday's closing event, the men's slalom.
For Austria's women, this was their fourth gold from five events after Elisabeth Goergl won both the super-G and downhill and Anna Fenninger took the super combined crown.
Only the gold won by Slovenia's Tina Maze in the giant slalom breaks Austria's cleansweep of the women's medals.
There was heartbreak for Finland's Tanja Poutiainen, second in the morning, who had been in contention for a medal before a mistake in the afternoon's run saw her finish joint sixth with Italian Manuela Moelgg.
Poutiainen had originally been disqualified, but was reinstated by race officials.