Busch had the strongest car for much of the race and led for 265 of the 367 laps at Darlington Raceway. But his machine appeared to fall away at the worst possible time and he faded to sixth.
Denny Hamlin finished his first full race since suffering a compression fracture in a vertebra in his lower back on March 24.
Jeff Gordon would up third in his 700th straight career start.
Points leader Jimmie Johnson was fourth and Kevin Harvick fifth.
Kenseth’s victory came without crew chief Jason Ratcliff, who was suspended for the No. 20 Toyota having an illegal part in a win at Kansas.
Carl Edwards finished seventh, followed by Juan Pablo Montoya and Dale Earnhardt Jr. Ryan Newman rounded out the top 10.
“This is a dream come true,” Kenseth shouted on his radio. “Thank you guys very much.”
Kenseth had won three times here in the Nationwide Series, but had never come closer than third in Sprint Cup. Once he cleared Busch, Kenseth had smooth sailing to the finish to win for the third time in his debut JGR season. It was Kenseth’s 27th career Sprint Cup victory.
No one matched Busch for most of the race. He had powered to victory in the Nationwide event here Friday night and was running strong again after taking the lead from older brother and pole-sitter Kurt Busch 74 laps in.
Kyle Busch stayed on top through several stretches of green-flag racing and through the first four restarts. But his machine couldn’t keep up after Kenseth went by.
Crew chief Dave Rogers said Busch had a cut tire and only 12 pounds of pressure left when he went into the garage.
“Honestly, I have only dreamed about winning the Southern 500,” Kenseth said. “This to me feels bigger than probably any win in my career.”
The win came with Wally Brown calling the shots as crew chief. Ratcliff is expected back for the next race after JGR had penalties imposed by NASCAR reduced on appeal.
The best chance to defeat Busch appeared to come from Kasey Kahne, who pressured his JGR rival on the restart after the fourth caution period. Kahne looked like he had cleared Busch but the car got loose and the back end slammed the wall.
Kahne was not happy with Busch’s maneuver.
“Three times this year me and Kyle had contact and I had a chance, capable-winning cars, it’s disappointing on the points side and not winning some of these races,” Kahne said. “Whether he hit me or just blew the air off, whatever it was, he blew his entry. I’m not sure what he was thinking on that.”
Kurt Busch had hoped to go from an upside-down finish when his car went airborne late and crash-landed on Ryan Newman at Talladega last week to his first Sprint Cup victory in two years at Darlington. He set a qualifying record to win the pole Friday and led 69 of the first 73 laps before getting passed by brother Kyle.
Kurt Busch struggled to stay close during the unexpected long stretches of green-flag racing. He was sent a lap down by Kyle on lap 279 and was part of a three-car dustup about 20 laps later that also involved defending series champion Brad Keselowski and Casey Mears.
There would be no joyous moment for Kurt Busch here on the 10-year anniversary of his side-by-side final lap dual with Ricky Craven as he finished 14th. Busch ended up in second, .002 seconds behind in Sprint Cup’s closest finish since it went to electronic timing in 1993.
The late accident at Talladega opened the door for the duo from Front Row Racing, David Ragan and David Gilliland to finish 1-2 in last week’s race. The pair couldn’t capitalize on that success at Darlington. Gilliland was 29th and Ragan 39th.
Danica Patrick improved on her placing in her second Sprint Cup race at Darlington, finishing 28th three spots better than in 2012.