The South African denied Minjee Lee an elusive maiden national championship with a tension-filled one-stroke triumph over Australia's popular pre-tournament favourite.
Buhai closed with a nervy three-over 75 at The Australian to finish with a nine-under 280 total and successfully defend the title she won last year at the Victoria Golf Club in Melbourne.
The 34-year-old is the first player to win successive Opens since Taiwan's former world No.1 and five-time major champion Yani Tseng in 2011.
Despite being as many as four shots in front down the stretch, Buhai's victory was anything but comfortable.
Incredibly, the champion couldn't find a single par all round, while the vanquished runner-up rolled in eight.
"I'm happy but I'm a little unhappy at the same time. My second-day (75), I let myself down a little bit," Lee said.
"But other than that I had a pretty good tournament, despite being tired getting over here (from the US)."
Trailing by four shots with five holes to play, Lee cut Buhai's lead to just one heading up the last after the 2022 British Open champion found the water on the 17th.
However, a precious par on No.18 was enough for Buhai as Lee was unable to fashion a ninth birdie in an otherwise valiant three-under round of 69.
After starting the day seven strokes behind, Lee knew she needed to conjure something special - and she delivered, with six birdies in the first 10 holes.
South Africa's Ashleigh Buhai (left) and Australia's Minjee Lee had a great Sunday duel. (AP PHOTO)
Some wretched bad luck on the 11th hole, when her ball ensconced itself deep in the upslope of a bunker, could have cruelled her momentum.
But the world No.5 brushed off the bogey and swiftly posted a bounce-back birdie on the 12th.
Lee's hopes again appeared to evaporate when she double-bogeyed the par-four 13th after leaving her approach short, then watched her too-cute chip shot spin back off the green.
But Buhai offered her a lifeline with successive bogeys of her own on 13 and 14 - her first blemishes since Friday - and the home hope replied with the eighth birdie to reduce the deficit to two shots once again.
Alas for Lee, Buhai calmly two-putted from 12 feet on the last to close out the championship.
Lee's latest near-miss extends the home title drought to at least a decade.
The legendary Karrie Webb is the only Australian to win the women's Open in the past 25 years, and last reigned in 2014.
Former world No.1 and five-time major winner Jiyai Shin, who closed with a 77, shared third with fellow Korean but unrelated Jenny Shin (72) after also getting to within one shot of Buhai early.
They finished at four-under, five strokes back, and one ahead of Australian Hannah Green, who, like Lee, posted her second successive top-five finish after a three-under 70 in the final round.
Compatriot Steph Kyriacou (73) shared fifth place with Green.
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