Kite opened in a Hualalai Golf Club course-record 63 and added a second-round 69 to his card for a total of 17-under 199.
Bobby Wadkins shot 68 to finish alone in third place at 10-under. Dana Quigley (69) was solo fourth, while defending champion Larry Nelson (70) tied Allen Doyle (69), Bruce Fleisher (70) and Walter Hall (72) for fifth place.
Kite started the day with a five-shot lead over Jacobs. He bogeyed the first hole, but recovered with seven birdies to just one more bogey over his remaining holes.
Jacobs was in a standstill until the par-5 10th. Even-par on his round through nine holes, Jacobs blasted a 377-yard drive with the wind. He then holed his second shot from 189 yards with an 8-iron for the most rare of shots, the double eagle.
Kite earned $258,000 for his fourth career Senior Tour victory. He won last years Gold Rush Classic, which was eliminated from this years schedule due to sponsorship problems.
Full-field scores from the MasterCard Championship