Australia's [Images] Stephanie Rice smashed the world record to win gold in the women's 400 metres individual medley final at the Olympics [Images] on Sunday.

The Australian upset the world champion Katie Hoff of the United States to win in four minutes 29.45 seconds, slicing 1.67 off the world record of 4:31.12 Hoff set at the U.S. Olympic trials six weeks ago.

Zimbabwe's Kirsty Coventry also went under the old world record to take the silver in 4:29.89 with Hoff settling for the bronze in 4:31.71.

Rice briefly held the world record in March but lost it to Hoff a few months later. The Australian also holds the world record for the 200 individual medley but said she could not believe she had regained the 400 record.

"I turned around and thought I saw 4.31 on the board," Rice said. "I was thinking that hurt a lot for a 4:31 but when I saw the clock said 4:29 I thought it was amazing."

Coventry, who provided Zimbabwe with their first Olympic swimming champion when she won the 200 backstroke at Athens four years ago, almost pulled off an upset.

Swimming from the outside lane after only just sneaking into the final, she stormed to the lead after the backstroke leg and although Rice regained control on the breaststroke, Coventry made another late charge on the last lap of freestyle.

"It was exciting, my first medal in Athens lane one and now here. I'm excited," Coventry said.

"It was a tough race to finish and Stephanie finished better, it was a great time."

Hoff's bronze medal helped erase some of the disappointment of Athens when she was so overcome by nerves that she failed to make the final.

The 19-year-old went into Sunday's race as the favourite after winning the past two world championships but was never able to mount a serious challenge to Rice.

"It was definitely a tough race. I can't really be mad, I was only half a second off my best time," she said.

"I'm really happy to get my first medal of the Olympics.

"I was trying (to fight back), I just didn't have it in the end. No problems with my nerves, I was fairly relaxed, I prepared well."