Chepngetich, who became the first three-time women's winner of the Chicago race, broke the previous world record of 2:11:53 set by Ethiopia's Tigst Assefa last year in Berlin.
"I feel so great, I'm proud of myself. This is my dream that has come true," said Chepngetich, the 2019 world marathon champion.
"I've fought a lot, thinking about the world record and I have fulfilled it."
Chepngetich, who also won in Chicago in 2021 and 2022, dedicated her latest victory to Kiptum, who set the men's world record at last year's race just four months before he died in a car accident at the age of 24.
"The world record has come back to Kenya, and I dedicate this world record to Kelvin Kiptum," said Chepngetich.
Runners observed a moment's silence on the start line in honour of Kiptum. Organisers also handed out stickers displaying Kiptum's record-breaking time of 2:00:35 for the 50,000 participants to put on their race bibs.
In the absence of Olympic champion Sifan Hassan, the 2023 Chicago winner, Chepngetich set a blazing early pace and reached the halfway point in 1:04:16, the fifth-quickest time in history for a half marathon by a woman.
"The weather was perfect and I was well prepared. The world record was in my mind," said Chepngetich.
Ethiopian Sutume Kebede, a former training partner of Kiptum's, battled valiantly to stay within sight of Chepngetich but gradually lost ground on the leader.
At one point, Chepngetich was on track to shave more than three minutes off the world record. She slowed slightly in the closing kilometres but still had plenty in the tank and beat her own personal best five-plus minutes.
Kebede came second on Sunday in 2:17:32, with Kenyan Irine Cheptai third in 2:17:51.
