In a striking turn-around from his lacklustre performance in the first televised clash three weeks ago, the First Minister summoned all his fighting spirit as he defended his currency proposals, warned the Scottish NHS was under threat from a No vote, and insisted the country would benefit from North Sea oil for decades to come.
He also put his opponent on the spot over unpopular welfare reforms and the presence of nuclear weapons on the Clyde.
In a rousing closing statement, watched by hundreds of thousands of voters, Mr Salmond said: "The future of Scotland should be in Scotland's hands. It's about believing we can govern ourselves better than anyone else.
"We don't need to rise up and be a nation again, we just have to vote to believe in ourselves."
A snap poll, conducted by ICM for the Guardian, suggested the First Minister was the clear winner. According to the online survey he came out on top by 71% to 29%.
The live BBC debate, staged at Glasgow's Kelvingrove Art Gallery and Museum, came little more than three weeks before voters go to the poll and as the first of 680,000 postal ballots go out.
As expected, the currency, North Sea oil and the future of the NHS dominated the exchanges.
Mr Salmond again ducked calls to outline a preferred alternative to his proposed currency union, a plan which has been ruled out by the main pro-UK parties.
Insisting an independent Scotland would have a range of currency options, he offered "three Plan Bs for the price of one".
But unlike in the previous TV debate, when he was booed for stalling on the issue, he won applause from the audience after telling them he said he was seeking a "sovereign mandate" from voters for his plan to share the pound.
Referring to the negotiations which would follow a Yes vote, he said: "I go as First Minister to argue what's best for Scotland. If I were to go and argue for second best that's what I'd get."
Mr Darling maintained the currency union proposal was a "second best option for Scotland".
He described Mr Salmond's apparent Plan B - keeping the pound without a formal deal or access to the Bank of England - as a "nonsense option".
But, despite returning to the issue when he had the chance to cross-examine his opponent, he failed to unsettle the First Minister who adopted a more familiar, pugilistic tone compared with his calmer demeanour of three weeks ago.
Mr Darling's exasperation showed when he shot back: "Stop playing games with us," as the pair clashed over the currency.
The former Labour chancellor won applause when he accused Mr Salmond of "scaremongering" by claiming Scotland's NHS was under threat from privatisation down south.
The First Minister conceded that Holyrood could not be forced to privatise the devolved health service but he claimed: "Moves to privatisation and charging will impose financial pressures on the health service."
Mr Darling hit back: "Taking on risks like not knowing what currency you'll have is the real threat to the NHS."
In contrast to the last debate, Mr Salmond managed to put Mr Darling on the spot when the two leaders cross-examined each other. Asking his opponent the cost of replacing Trident, he said: "We can choose not to spend it."
The debate, hosted by Glenn Campbell, was screened live on BBC1 in Scotland and on BBC2 across the rest of the UK. Mr Salmond and Mr Darling faced a representative audience of 200 people selected by pollsters ComRes. They included 40% Yes supporters, 40% No and 20% undecided voters.
However, another theme in voter reaction to the debate was frustration that both men had been too aggressive, often shouting over each other, and that Glenn Campbell had not been succesful in intervening more decisively.
Blair Jenkins, chief executive of the pro independence Yes Scotland campaign, said afterwards: 'This was an overwhelming victory for Yes. The First Minister's message was clear, optimistic and passionate and spelled out a no-nonsense message of the positives and opportunities of independence."
But Better Together campaign director Blair McDougall said: "Alex Salmond still can't give a credible answer on currency. While the world was watching he even went as far as to threaten to default on our debts."
Both politicians stressed their desire to build a fairer society as they made their opening statements.
But while Mr Salmond argued "more and more Scots" were favouring independence, the former chancellor continued to press him for answers on the impact of leaving the UK.
The First Minister said this was an "extraordinary time" for Scotland with "the eyes of the world" focused on the nation.
He said Scotland had voted on the country's future twice before - in 1979 when insufficient voters backed a devolved assembly and in 1997, when the ballot that established the Scottish parliament was held.
"Twice before in Scotland's recent history we've stood at the crossroads," the SNP leader said.
"In 1979 we didn't get the Parliament we voted for but instead got 18 years of Tory government - Margaret Thatcher, the deindustrialisation of Scotland, the poll tax.
"In 1997 we took our opportunity and since the Parliament came to Scotland life has got better. We introduced free personal care for the elderly, we removed tuition fees.
"But there is much, far to much, that is still controlled by Westminster. We couldn't stop the bedroom tax, we can't stop illegal wars, we can't stop the poor and disabled bearing the brunt of welfare cuts, we can't stop the spread of foodbanks in this prosperous country, we can't stop countless billions being wasted on a new generation of weapons of mass destruction.
"Now we have the opportunity to change all of that.
"Three weeks on Thursday we can take matters into Scottish hands. Next to no-one wants to go backwards, more and more Scots want to complete the home rule journey."
He added: "We are a rich nation, a resourceful people. We can create a prosperous nations and a fairer society, a real vision for the people of Scotland. This is our time, it's our moment, let us do it now."
While Mr Darling said his rival might have "some good lines" he added: "A good line is not always a good answer, it's answers now we need."
He said Mr Salmond was "asking us to take his word for it on everything, no plan B for anything".
But he continued: "The basic difference between Alex Salmond and me is this, my first priority is to build a fairer and better society. His first priority is to create a separate state no matter what the risks and what the cost.
"While he has spent the last two years talking I have been listening. I know people want change, but they also want security on jobs, on pensions, on their children's future.
"That's why my message is that no thanks will not mean no change. That's why there will be more powers for the Scottish Parliament on tax, on welfare, on everything that makes sense to decide here.
"We have delivered before we will deliver again.
"Tomorrow we Scots will start voting by post, so we need answers tonight, right here, right now.
"The United Kingdom is about sharing risks and rewards with our neighbours, being part of something bigger gives us opportunities and security as well as our Scottish identity in decision making."
The first part of the debate, held at Glasgow's Kelvingrove Art Gallery and Museum, covered economic issues including currency and oil and gas revenues.
Both leaders were asked about oil and gas estimates following the intervention of Sir Ian Wood, an industry expert who believes the Scottish Government has over-estimated the remainder of reserves in the North Sea.
Mr Darling warned that successive governments over the years have been too optimistic about the amount of production and therefore the amount of revenue from oil, while Mr Salmond said no country would view oil as anything other than an asset.
Mr Darling said: "The Office for Budget Responsibility, as you say, has given its estimates, and it has proved to be too optimistic.
"In the past couple of years the amount of revenue we have got from the North Sea has been £5 billion less than was expected.
"That is equivalent to more than we spend on schools in Scotland and almost half of what we spend on the health service."
Mr Salmond hit back: "The No campaign, the Tory party, the Labour party, are the only people in the world who argue that the possession of substantial amounts of oil and gas are somehow a curse as opposed to an asset for a country."
He added: "North Sea oil and gas is about 15% of Scotland's overall economy. It is about 20% of Norway's overall economy, and I haven't seen it doing Norway much harm.
"The reality is that North Sea oil and gas will be with us way beyond 2050."
The leaders faced further questions on which currency would be used in an independent Scotland, returning to the issue which dominated the first televised debate.
Mr Salmond insisted he was seeking an mandate from the Scottish people to call for a formal currency union with the rest of the UK.
Meanwhile, Mr Darling repeated his calls for the First Minister to come up with a Plan B.
Mr Salmond said: "I want people to back the proposition that we should share sterling in a currency union.
"That mandate is crucial, and that is what I want people to support, because I believe if they support it and send me into negotiations as First Minister then that will be the outcome.
"I have set out the options to point out there are other things we could do.
"But I go as First Minister to argue what is best for the people of Scotland.
"If I was to go in arguing for second best, then second best is what we would get."
Mr Darling said both sides would have to agree to a currency union.
"You are taking a huge risk if you think it is just all going to fall into place.
"I think the currency union would be bad for Scotland because our budget would have to be approved not by us, but what would then be a foreign country.
"It wouldn't be best for the rest of the country either."
Mr Darling returned to his demands for Mr Salmond to name his Plan B if a currency union cannot be agreed.
Mr Salmond responded: "I set out the options very clearly - three Plan Bs for the price of one.
"They are just like buses...you expect one and then three turn up at once."
He added: "We don't need permission to use our own currency.
"The argument actually is that they will deny us the assets of the Bank of England. The reason that won't happen is that if you deny us the financial assets, then the UK will get stuck with all of the liabilities."
Mr Salmond said no chancellor would let Scotland away with its share of the debt liabilities and therefore a currency union would be agreed.
Mr Darling said: "If your first message in the world is here we are, here is Scotland, and by the way we've just defaulted on our debt, what do you think that would do to people who are lending us money in the future.
"Nobody would lend us any money in the future."
The two men also clashed about the future of the NHS, with the Better Together leader accusing the pro-independence campaign of scaremongering
Supporters of a Yes vote argue that Scotland must leave the UK to protect the health service from privatisation.
Mr Darling claimed they had been "subjected to a scare campaign" over the NHS.
"What we need is less of that scaremongering and a realisation we all want the NHS to do well, we all want it to be there at the point of need, but to do that you need funding.
"Frankly taking on risks, not even knowing what currency you've got is the real threat to the National Health Service."
The Labour MP argued: "Being part of the United Kingdom means that we have strength and security that means we can fund it, especially with the pressures of an ageing population here in Scotland.
"At the moment the total control over the NHS, quite rightly, lies with the Scottish Parliament and the Scottish Government not only in terms of policy but in terms of financing. The Scottish Parliament can decide or how much or how little it spends.
"Because of the strength and security of the United Kingdom public spending is £1,200 more per head than it is in the rest of the United Kingdom and that is the way to guarantee spending on the National Health Service."
But Mr Salmond insisted cutbacks in spending south of the border could hurt the health service in Scotland if the referendum resulted in a No vote
He stated: "Under devolution we can't be forced to privatise the health service because we've got operational control of it, but we don't have financial control of it, and that is a serious problem.
"The danger for Scotland is this, if England goes down the road of privatisation and charging and the general cuts to public spending, it's not that they can force us to privatise the health service of Scotland because they can't. It's the financial pressure makes things extremely difficult for the health service in Scotland.
"That is why to have a health service we can all trust and rely on we've got to have a health service where we have financial control as well as policy control, so we can keep the National Health Service as the greatest public institution in Scotland."
Welfare reforms also came under the spotlight, with the First Minister using the debate to hit out at Westminster's welfare reforms
Mr Salmond said some 100,000 disabled Scots were losing out as a result of the changes to benefits, adding: "I condemn the way people with disabilities are being treated. I think it is an indictment that Westminster has handled social security.
"Yes we've got troubled economic times, but the mark of a government is when you are in difficult economic times you don't take it on the disabled and you don't take it out on families with children and you don't impose the bedroom tax, which must be the most ludicrous tax of all time."
In heated exchanges he told Mr Darling: "You're in bed with the Tory Party, in bed with the Tory Party."
Mr Darling said as a Labour MP he did not support the UK Government's welfare reforms.
But he argued that Scotland's ageing population meant it was better if the costs of providing social security are spread across the UK as a whole.
The Labour MP said: "No-one could support people who need help being denied, no-one could possibly support that. We have an obligation to help people who need support.
"However to do that you need the means to do it. What concerns me is if you end up in the situation where you are cutting off opportunities for firms that generate wealth and therefore generate taxation, to pay for these things, it is going to be less likely you can provide the level of support you need in the future.
"That's why I think the approach he is proposing is absolutely wrong. We know there are people with disabilities, we know we've got an ageing population that will require more medical care, we know we've got a falling working age population.
"Why take that burden on five million people when it could be pooled and shared across 63 million, it makes no sense whatsoever."
Summing up the case for independence, Mr Salmond said: "We will have opportunities as an independent country, and the means of taking advantage of them.
"We will have challenges as an independent country, and we will have to rise to these challenges to solve them.
"In contrast the No campaign has absolutely nothing positive to say about the future of this country. In reality there is only one thing we can guarantee...at each and every election in an independent Scotland we will get the government that we vote for.
"This referendum is about the future of Scotland, and the future of Scotland should be in the hands of the people of Scotland."
Mr Darling chose to return to the currency question in his closing remarks.
He said: "Of course we could go it alone, but I don't believe that Scotland will be as successful as we will be as part of the United Kingdom.
"I raised the issue of currency again tonight because every country's starting point is currency.
"Uncertainty about currency can bring a country to its knees.
"I know there are some who are thinking about giving independence a chance, but when we can't be told about currency, I don't think that can be trusted."