On the second playoff hole Sunday, No. 16 at Harding Park, Daly missed a 2-foot par save, giving Woods his fourth title at the WGC-American Express Championship.
Woods played in the group ahead of Daly every round this week. The No. 1 player in the world stood and watched when Daly drove the seventh green on Thursday, slapping hands with Daly as they walked by each other.
Both parred 18 in regulation on Sunday to set up the playoff between two of golf's longest hitters, and most popular stars. The galleries were loud and ready as the two tied at 10-under-par 270.
The first extra hole was 18 and Woods went first and smoked a 346-yard drive into the first cut on the right. Daly hit one 11 yards longer, then watched Woods' approach land close, but spin back on to the fringe. Daly followed with a similar shot that did not stay on the putting surface.
Daly putted and left his birdie try a foot from the hole. He tapped in for par and Woods came up 2 feet short with his birdie putt. Woods converted and they headed to 16, a hole Daly drove on Friday, to continue the playoff.
Woods was in the left first cut at 16, while Daly's drive came to rest right of the fairway in the trees. Woods hit his second on to the fringe 25 feet short of the flag, while Daly, who had a clear path to the green, stopped his 20 feet right of the hole.
Woods played first and came up one roll short with his birdie putt. He tapped in for par and Daly missed his on the left side. Daly had 2 feet for par and the ball lipped out, handing Woods his 46th PGA Tour victory.
Woods certainly played well enough to hoist the trophy, but it was Daly who made the crucial error. Otherwise, it was a spectacular week for Daly and his peers acknowledged that.
'He drove it so good it was a joke,' said Woods. 'He played solid. He should take a lot of positives from it. John should take a lot out of this week. He played well.'
Woods shot a 3-under 67 and Daly, the overnight leader, managed a 1-under 69 on Sunday.
Colin Montgomerie will have to wait for his first official PGA Tour victory in the United States. He got nothing going with his putter on Sunday and posted an even-par 70 and shared third place with Sergio Garcia (69) and Henrik Stenson (68). The trio came in at 8-under-par 272.
The story on Sunday was Daly and Woods and the reigning Masters and British Open champion joined Daly in the lead at 10 under par with a 5-foot birdie putt at the 12th.
Daly missed the green at the 13th, but chipped in for birdie to go one ahead. Woods went from one side of the rough to the other at 14 and made bogey, falling two behind.
Woods responded at 16. His approach stopped 3 feet from the hole and he rolled in the putt to get to minus-10 and claw within one. Woods narrowly missed birdie putts at the last two holes, but got some help from Daly.
At the 17th, Daly's tee ball landed 30 feet from the hole. He ran his birdie try four feet past and missed the comeback putt, tying him atop the leaderboard with Woods.
Daly had a reasonable look at birdie on the 72nd hole, but his putt came up short, setting up the eagerly anticipated match up.
Vijay Singh shot a 1-under 69 and tied for sixth place with Graeme McDowell (68), David Howell (67) and David Toms (69). The group came in at 5-under-par 275.