The Red Bull driver, roared on by his large Dutch following at a sweltering Spielberg, denied Charles Leclerc the first win of his career by passing the young Ferrari driver with just two laps to go.
Verstappen's winning move on Leclerc was investigated by stewards that decided his manoeuvre was a "racing incident".
"What the hell is that?" Leclerc yelled over the team radio following the Dutchman's move. Verstappen protested his innocence.
"It is hard racing, otherwise we have to stay at home," said Verstappen when informed he was under investigation.
F1 Austrian Grand Prix in pictures
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"If those things are not allowed in racing, then what is the point in being in Formula One?"
Leclerc said: "I will let the stewards decide. I was on the outside of the corner the lap before. He left the space, but he didn't on the next lap. I had to go wide and didn't have a chance to come back at him."
Verstappen began alongside Leclerc on the front row but dropped to seventh following a torrid start.
Verstappen plummeted from second on the grid to eighth off the start (Reuters) (REUTERS)
The Dutch driver was then running in fourth place with 20 laps to run, but passed Sebastian Vettel, Valtteri Bottas and finally Leclerc in a stunning end to the race.
Bottas finished third for Mercedes, while Vettel fought his way past Lewis Hamilton on the penultimate lap to take fourth.
Hamilton will head to his home race at Silverstone in a fortnight's time, 31 points clear of Bottas in the championship.
British teenager Lando Norris finished sixth for McLaren, equalling his career best.
Leclerc did not put a foot wrong, and his initial cause was aided by troubles for his rivals.
Leclerc build astrong lead over Bottas (AFP/Getty) (AFP/Getty Images)
As Leclerc roared down to the first corner, Verstappen, who started alongside the Ferrari driver on the front row, staggered away from his marks, losing five places to seventh.
Vettel made up five spots, and was running in fourth when he made his first stop, but his Ferrari crew were not ready for him. As the mechanics came running out from the garage with Vettel's tyres, one almost got mowed down by Bottas' Mercedes. He stayed on his feet, but the stop took three times longer than it should have, and the German fell down the order to eighth.
erstappen celebrates winning the Austrian Grand Prix (Reuters)
Then, with Hamilton mounting a charge, he ran off the road, damaging his wing. That left Leclerc leading from Bottas, Vettel, Verstappen and Hamilton at the midway stage.
Verstappen, at Red Bull's home race, then began to make amends for his slow getaway.
Turning on the style, he roared past Vettel on lap 50. Five laps later he dived underneath Bottas to take second place, with Leclerc five seconds up the road.
Surely, he couldn't do the unthinkable?
Verstappen celebrated the win but an investigation is ongoing (Reuters)
But by this stage, Verstappen was one second faster than Leclerc, and with a handful of laps to go was crawling all over the back of the Monegasque's gearbox.
The two 21-year-olds went wheel-to-wheel in a brilliant finale, before Verstappen's contentious move at the right-handed Turn 3 on lap 69 of 71.
Leclerc felt Verstappen did not leave him enough room, the pair banging wheels on the exit, Leclerc falling off the circuit.
The stewards immediately noted the decision with both Verstappen and Leclerc ordered to report to the stewards, but the Dutchman's retained his fine win after a lengthy wait.
Results
1 Max Verstappen (Ned) Red Bull 1hr 22mins 01.822secs
2 Charles Leclerc (Mon) Ferrari 1:22:04.546
3 Valtteri Bottas (Fin) Mercedes GP 1:22:20.782
4 Sebastian Vettel (Ger) Ferrari 1:22:21.432
5 Lewis Hamilton (Gbr) Mercedes GP 1:22:24.627
6 Lando Norris (Gbr) McLaren at 1 lap
7 Pierre Gasly (Fra) Red Bull at 1 lap
8 Carlos Sainz (Spa) McLaren at 1 lap
9 Kimi Raikkonen (Fin) Alfa Romeo Racing at 1 lap
10 Antonio Giovinazzi (Ita) Alfa Romeo Racing at 1 lap
11 Sergio Perez (Mex) Racing Point at 1 lap
12 Daniel Ricciardo (Aus) Renault at 1 lap
13 Nico Hulkenberg (Ger) Renault at 1 lap
14 Lance Stroll (Can) Racing Point at 1 lap
15 Alexander Albon (Tha) Scuderia Toro Rosso at 1 lap
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