Steele holds off Oosthuizen to win maiden LIV Golf title in Adelaide
The 41-year-old American led overnight by one and after an early bogey refocused to reel off five straight birdies on the front nine in a four-under-par 68 to finish 54 holes at the Grange Golf Club at 18-under.
In front of bumper crowds and a carnival atmosphere, South Africa's 11-time European Tour winner and 2010 British Open champion Oosthuizen came second after seven birdies in his 65.
Spanish two-time major winner Rahm was among a group of five to finish a further shot back after firing 64 to bank his sixth consecutive top-10 finish since defecting to the Saudi-backed league this year.
Alongside him tied for third were Charl Schwartzel, Andy Ogletree, Joaquin Niemann and Dean Burmester, who won the previous event in Miami.
It was Steele's first LIV win since joining Phil Mickelson's "Hyflyers" team last year following 12 years on the PGA Tour that garnered three titles.
He credited Mickelson for a breakthrough victory that earned him $4 million (£3.16m) .
"I had a good talk with him yesterday, sat just the two of us for about an hour and he was telling me there is no reason I can't be one of the best players in the world," he said.
"He went through every part of my game and said, 'You just need to start believing in it'.
"And I thought okay, if one of the best players ever in the game is telling me that, I better start believing it."
'Dream come true'
Steele began with a one-stroke advantage, but dropped a shot on the third as Oosthuizen picked up three birdies in his opening five holes for a four-way share of the lead.
Undeterred, Steele bounced back by rolling in five straight birdies between the fifth and ninth holes to rebuild a three-shot buffer at the turn.
But another bogey at the 11th opened the door again and Jinichiro Kozuma and Ogletree jumped through with well-taken birdies to narrow the gap to one.
With the pressure on, Steele holed a clutch putt at the 13th for birdie to again move two clear before a birdie from Oosthuizen at the 17th set up a tense finale.
But Steele lived up to his surname with an approach shot at the 18th to within six feet to secure the par he needed to win.
"Obviously it was harder today than it was on Friday or even yesterday, but I did manage to play freely and that's the only reason I hit so many good shots," he said.
"I knew there would be hard moments today regardless and that I just needed to get back in there and start playing with freedom again."
The all-Australian "Ripper GC" led by Cameron Smith won the team title on 53-under - the lowest score since LIV was launched in 2022.
But they needed the league's first-ever team playoff to do so, winning on the second extra hole from Oosthuizen's all-South African "Stinger" team.
"It's a dream come true for us," said Smith. "We've been talking about this all year and it's unreal."