"I really wanted to win the gold medal for my grandfather, who is 60 this year and is fighting against stomach cancer," Lee told South Korea's Yonhap news agency after beating Russia's Vitali Makarov in the final of the men's under 73 kg category.
"I'm thankful to my father and mother, who prayed for me."
But in a major upset at the women's judo competition at the Athens Games, Germany's Yvonne Boenisch turned the tables on North Korea's Kye Sun-hui to claim gold in the women's under 57 kg division.
Lee, dubbed "Mr Ippon", was in a class of his own as he beat two previous world champions on his way to the gold. Double European champion Gennadiy Bilodid of Ukraine was his other victim.
The South Korean has lost only once in the last two years, dispatching most opponents for the maximum ippon score, earning him his nickname.
World junior champion Leandro Guilheiro of Brazil came back from a quarter-final defeat to beat Moldova's Victor Bivol for bronze.
American Jimmy Pedro, world champion from 1999, turned back the years to win his second Olympic bronze medal after France's Daniel Fernandes submitted while being held down.
Pedro had retired after a disappointing Sydney Olympics four years ago.
Boenisch proved a surprise after being well beaten, by ippon, a year ago in the world final.
But she proved that appearance was no fluke by going one better this time, out-gripping and out-thinking Kye to win by a small score, yuko, at the end of the five-minute bout.
In an all-European affair for bronze, Deborah Gravenstijn of the Netherlands came from behind to beat France's Barbara Harel.
Cuba's former world champion Yurisleidis Lupetey beat reigning Olympic champion Isabel Fernandez of Spain in a scrappy encounter to win the other bronze medal.