The 23-year-old Englishman, while winning the European Championships gold medal, knocked 0.13 seconds off his own record set at the Rio de Janeiro Olympics in 2016.
It was the fourth time he has set a new mark in the discipline in which he has been unbeaten for four years.
“It’s incredible. I wasn’t targeting the record at all,” said Olympic champion Peaty after winning his ninth European long course title.
“When I entered the pool, I felt the passion and the flow. When I touched the wall, I didn’t see the time properly and needed some moments to realise. But, once I got it, it was an amazing feeling.”
Peaty had threatened to come close to his mark, though, after two brilliant swims in the heats and semi-final on Friday.
Even though he touched at halfway in the final in a swift 26.65 seconds, it still looked as if the record might be just out of reach.
Even after touching the wall, he could hardly believe what he had achieved, shouting “no way!”
The victory was so dominant that the silver medallist, Peaty’s British team mate James Wilby, was 1.54 seconds adrift.
It felt particularly sweet for Peaty as the championships venue, the Tollcross International Swimming Centre, was where his remarkable career took off when he won Commonwealth Games gold in 2014.
“It started in this pool. Oh my God, I cannot believe that,” he said, having bounced back from his first setback for four years when he lost the 50 metres breaststroke final at this year’s Commonwealth Games in Australia.
“Sometimes, you’ve got to have a bad race to realise how much you love the sport. I was just too tense, I just wasn’t me (at the Commonwealth Games).”
In all, this was Peaty’s 17th major championship title and he has the chance to add three more at these Championships.