2003 champion Cheruiyot, facing the largest field of top U.S. runners in more than two decades, pulled ahead in the latter stages to overtake fellow Kenyan Benjamin Maiyo and American Meb Keflezighi, lowering the course record by a second.
"I thought maybe I was going to slow down but I was very strong," Cheruiyot told a news conference after winning the $100,000 winner's prize and another $25,000 for setting the record.
It was the 14th time in the last 16 years that a Kenyan has won the world's oldest annually contested marathon.
The 27-year-old finished the 110th edition in an official time of two hours, seven minutes and 14 seconds, beating the previous record set by fellow Kenyan Cosmas Ndeti in 1994.
Kenya's Maiyo finished second in 2:08:21 and Keflezighi, who was born in Eritrea, third in 2:09:56 -- the fastest time for an American in 21 years. Americans Brian Sell finished in fourth place and Alan Culpepper in fifth.
It was the first time three Americans have finished in the top five since 1985. No American has won the race since Greg Myer in 1983.
"The crowd support was unbelievable," Culpepper told a news conference, referring to the U.S. performance. "People were saying 'we believe in you, we believe in you'. We haven't had that in a long time.
"It bodes very well for the future. Three or four years ago I don't know if there would have been so many guys there to pick up the slack."
Cheruiyot, who finished fifth in last year's New York City Marathon, put distance between himself and a thinning pack of U.S. runners after Heartbreak Hill, the steepest climb on the course, and was shoulder-to-shoulder at times with Maiyo.
"I like running in the hills. To climb is very easy for me," said Cheruiyot, who moved into the lead at the 21st mile.
Cheruiyot said he deliberately held back because he knew what to expect from the hilly course and closely followed the instructions of his trainer, world record holder Paul Tergat.
In the women's field, Jeptoo overtook last year's New York City Marathon winner Jelena Prokopcuka of Latvia and Reiko Tosa of Japan who dominated the first half of the race.
"I'm happy so much," said the 25-year-old Jeptoo, wearing her green wreath over tinted red hair wound in a bun.
Jeptoo, who won the women's race in her first attempt at a U.S. marathon, clocked an official time of two hours, 23 minutes, 38 seconds, becoming third straight Kenyan woman to win the race.
Her time fell short of the women's course record of 2:20:43 set by Margaret Okayo of Kenya in 2002.
The field of 22,473 runners was the second largest in the history of the race, eclipsed only by the 100th anniversary of the marathon in 1996 when 38,708 people competed.
It kicks off a new era in marathon running by starting a two-year series involving the five big city marathons.
Organisers of the Boston, London, Berlin, Chicago and New York events have combined for a World Marathon Majors series, which will culminate in New York next year with prize money of $500,000 for the overall men's and women's winners.
The Boston win gives Cheruiyot 25 points in the Majors.