The South African, who won gold in the 100 breaststroke at the London 2012 Olympic Games, raced to gold in a Games record 26.76 seconds, beating Peaty into silver.
The result was a reverse of the 100 final on Saturday and meant the 26-year-old successfully defended the title he won in Delhi four years ago.
"I look forward to competing with Adam more often," Van der Burgh told the BBC of his 19-year-old rival.
Commonwealth Games
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"He's giving the old man a chase for his money. I remember the days when I was young and he's fired me up. I've been complacent in the last two years."
More Games records fell when Jazz Carlin hit all the right notes to become the first Welsh woman for 40 years to win a Commonwealth gold medal in the pool.
The 23-year-old stormed to victory in the 800 freestyle ahead of New Zealand's Lauren Boyle, a former world short course champion, and Brittany MacLean of Canada in a competition-best time of eight minutes and 18.11 seconds.
Carlin is only the second woman from Wales to win a swimming gold at the Games, following Patricia Bevan who won 200 breaststroke gold in 1974 in Christchurch.
"I knew it was going to be a tough race," she told reporters. "There were world champions and Aussie record holders in there.
"At the European Championships I got pipped in the last 100 metres so I made sure that didn't happen tonight."
Australia continued their fine form at the Tollcross International Swimming Centre, following 10 medals on Sunday, with a clean sweep in both the men's 200 backstroke and women's 100 freestyle finals.
Mitch Larkin added gold to the two backstroke silver medals he has already won in Glasgow, edging out compatriots Josh Beaver and Matson Lawson to ensure a green and gold podium.
Sisters Cate and Bronte Campbell then led the Australians in the freestyle, winning gold and silver respectively ahead of in-form Emma McKeon.
The night ended with South African Olympic 200 butterfly champion Chad le Clos securing another gold and another Commonwealth record by winning the 100 butterfly, adding to the individual gold, silver and bronze he has already won in the pool during these Games.
Commonwealth Games
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Commonwealth Games
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