Taylor began the final round six strokes off the pace but five birdies after the turn propelled him to a closing seven-under-par 65 at a blustery Pebble Beach Golf Links as he posted a winning total of 17-under 270.
Overnight leader Mickelson, seeking his first PGA Tour win since the 2013 British Open, stunningly lipped out a five-foot birdie putt at the last to force a playoff and had to settle for second place after carding a roller-coaster 72.
Swede Jonas Blixt, one of four players who held at least a share of the lead in the final round, was a further stroke back in third at 15 under after shooting a 69.
“It's been a long time and I didn't think it was going to happen,” an emotional Taylor, 39, told CBS Sports after clinching his first PGA Tour win since the 2005 Reno-Tahoe Open, and his third overall.
“I've worked so hard and just kept getting knocked down and knocked down,” said Taylor, who has not played a full season on the PGA Tour since 2012 while bouncing between it and the satellite Web.com tour over the past three seasons.
“I can't believe it actually happened again. Just amazing. I'm at a loss for words right now. I didn't even have my tour card and got in this week on past champion status, and now I'm playing in the Masters pretty soon. It's a dream come true.”
Taylor had moved into a share of the lead for the first time with a tap-in birdie at the 15th, then drained a 28-footer at the par-four 16th to edge one ahead before clinching the winner's cheque for $1.26 million.
Mickelson, a four-times champion at Pebble Beach, struggled with his iron play for much of the day and needed to finish birdie-birdie to force a playoff after sinking a clutch par putt from 12 feet at the 16th.
He made the first of them, rolling in a tricky 13-footer from the back of the green at the par-three 17th, but lipped out for birdie from short range at the par-five 18th just when he seemed headed for a playoff.
“I am not quite where I want to be yet and I am a little bit more determined to get it back,” said Mickelson, who had been aiming to match Mark O'Meara's record five wins at Pebble Beach. “I also know that I am close.
“As nervous as I was and as disappointed as I am that I didn't win, this was so much fun for me to get back into the thick of it, to feel the pressure, to make a couple of clutch putts on 16 and 17.
“It never crossed my mind that one on 18 wouldn't go in.” – Reuters
Original source: Journeyman Taylor wins at Pebble Beach