Murray was on the ropes for a set and a half in west London, but the world number two staged a gritty revival to surpass a group of eight four-time Queen's champions including John McEnroe, Boris Becker, Andy Roddick and Lleyton Hewitt.
The King of Queen's.@andy_murray is now the first man to win five titles at the Queen's Club 👏 pic.twitter.com/G2XW1XZoKU
— Wimbledon (@Wimbledon) June 19, 2016
The 29-year-old survived a barrage of 14 aces from Raonic to finally subdue the Canadian fifth seed in two hours and 13 minutes, in the process becoming the first player to successfully defend the title since Roddick in 2005.
He recovered from 3-0 down in the second set and now has a remarkable 30-5 match record on the grass at Queen's, a venue that has remained close to the Scot's heart since he secured the first ATP Tour match win of his career against Santiago Ventura in 2005.
It was Murray's 37th career ATP title and his second of 2016 as the former Wimbledon champion erased the bitter taste of French Open final defeat against Novak Djokovic two weeks ago.
Despite picking up the oversized trophy, a cheque for £322,126 ($460,000, 410,000 euros) and 500 ranking points, the most significant prize of the week for Murray is the knowledge he is in peak form ahead of his bid to dethrone Djokovic at Wimbledon, which gets under way on June 27.
Murray's success maintained his 100 percent record in Queen's finals in the week he reunited with coach Ivan Lendl, who will have relished getting the better of old rival McEnroe in his new role as Raonic's coach.
Tennis star Andy Murray helps Syrian refugees with every ace scored
Raonic, a 6ft 5in former Wimbledon semi-finalist, had won all 47 of his service games en route to Sunday's showpiece.
But Murray's serve was almost as potent in his semi-final win over Marin Cilic and it was no surprise to see both use their delivery to maximum effect in a tight first set.
Yet, after all the big serving, Raonic seized the tie-break not with his primary weapon but with a well executed smash that brought up set point and a powerful passing shot that punished an ill-advised Murray approach to the net.
Showing signs of McEnroe's influence, Raonic was increasingly confident with his movement and ground-strokes and he appeared to deliver a hammer blow to Murray's chances in the second game of the second set.
Unfurling a fierce forehand winner that left Murray down on one knee and shaking his head in frustration, Raonic had all the momentum as he surged into a 3-0 lead.
But, despite the bleak situation, Murray recovered his composure and willed his way back into the match with a quite brilliant return to break in the fifth game.
Converting his first break point of the match in such clinical fashion reenergised Murray and he won five of the next six games to take the set, levelling a match that had been slipping away minutes earlier.
With the tide turning in Murray's favour, both players must have recalled the Scot's dramatic fightback from two sets to one down to beat Raonic in the Australia Open semi-finals in January.
Murray set about ensuring he would emulate that come-from-behind victory with a sublime drop shot to win a 24-shot rally and earn the crucial break in the first game of the final set.
Celebrating with a clenched fist and a roar of "lets go", Murray kept the pressure on and clinched his historic triumph when one last searing return was dumped into the net by Raonic.
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