The Scot had seven birdies, including three in succession mid-round, in a final-day 65 for a 13-under par total on the Harbor Shores course at Benton Harbor.
The victory not only earns the eight-time former European No.1 a 10-year exemption on the Champions Tour but also a place in this year's US PGA Championship at Valhalla.
Tom Watson, the 2014 USA Ryder Cup captain, was second on nine under par, having also shot a closing six-under-par 65.
Montgomerie began the final round with a one-shot lead over Bernhard Langer and he had increased it to two shots by the turn, then doubled that margin when Langer dumped an 8-iron into the water at the par-3 11th hole and made double bogey. Langer eventually shot 70 and tied with the American Jay Haas for third.
Watson, bidding to become the oldest senior major winner at age 64, was six under par on the day through 14 holes and parred his way in for a 65.
Monty had numerous close calls in majors during his career on the regular tour.
He lost the 1994 US Open at Oakmont to Ernie Els in a three-man 18-hole play-off that also included the American Loren Roberts.Monty shot 78 as Els and Roberts matched 74s and Els won on the 20th hole.
The Scot contested another play-off the following year, at the 1995 PGA Championship at Riviera in suburban Los Angeles. He birdied the final three holes to earn a place in the play-off against Australia's Steve Elkington, but lost on the first hole of sudden death.
Els humbled Montgomerie again at 1997 US Open at Congressional, beating the Scot by one shot.
Almost a decade later, in the 2006 US Open at Winged Foot, Montgomerie had a 7-iron from the middle of the fairway to the 72nd green, but came up short, made double bogey and lost to the eventual champion Geoff Ogilvy by one shot.
The Scot's other runner-up finish in a major came in the 2005 Open at St Andrews, where he finished five shots behind Tiger Woods.