Arndt, who won silver in the Olympic time trial in London and plans to retire at the end of the season, finished the 15-mile race in 32 minutes, 26.46 seconds, an average speed of 27.71 mph.
''I'm very proud I was able to defend my title but that won't change my mind. After this year I'm done,'' she said. ''I'm relieved that my career is over, I've had enough.''
Stevens said she was content to settle for silver on the tough course.
''I gave everything I had. I made no mistakes; this is what I was able to do. So I'm happy taking the silver medal,'' she said. ''Judith earns the gold. She's been top class her whole career.''
The time trial route went from the cobbled streets of Eijsden through the hills of the Limburg province, ending in a brutal climb up the Cauberg hill in Valkenburg.
The 36-year-old Arndt powered up the Cauberg, the most famous hill in Dutch cycling, to seal her second world champion's rainbow jersey in front of thousands of cheering fans.
Villumsen looked capable of besting Stevens' time until she faded on the Cauberg.
Arndt and Villumsen won silver together on Sunday in the team time trial with the Orica-AIS team. Stevens, a former Wall Street banker, won gold in the team time trial.
Czech rider Martina Sablikova, a multiple world and Olympic champion speedskater, finished ninth, nearly two minutes behind Arndt.