Wong, 22, scored a comfortable 21-17 21-14 victory and then declared: "It's the best win of my career so far. I came in focused and well prepared to run for everything he gave me and also play faster than him."
Wong, world-ranked 49, played Taufik (pictured right) in 2009 but lost out in a close game.
At Wembley he got his revenge.
Wong said: "He's by far my biggest scalp."
"This morning I did not think I could beat him but I wanted to give him a real hard game today," added Wong (pictured left) who is the son of Singapore's two most famous national champions.
Wong's father, Wong Shoon Keat, had in fact won Singapore's first ever badminton gold medal at the Southeast Asian Games in 1983.
Mixed day for the hosts
England's Toby Penty, 19 on Friday and at his first world championships, lost 21-13 21-13 to 11th seed Sho Sasaki and then tipped the Japanese as a possible title winner.
"He's a better player than me and maybe a dark horse to win it."
But Penty was pleased with his own performance, saying: "As a junior coming up I think I acquitted myself well. I thought I played a lot better than in my first round match even though I won that one."
Earlier on, Penty's fellow wild cards in the women's doubles discipline, Alexandra Langley and Lauren Smith, were also ousted by Hong Kong's Poon Lok Yan and Tse Ying Suet 21-10 22-20.
The sole survivors for the host nation are the mixed doubles pair of Chris Adcock and Imogen Bankier (pictured right), who upset Thailand's 8th seeded pair of Songphon Anugritayawon and Kunchala Voravichitchaikul in a tense match that ended with scores of 24-22 21-19.
"We know we can win against this sort of pairs and there is no better place to win than in your own world championships," said Adcock.
"We have a really good time together on court and in practice, and that's what makes us a good pair."
The pair will face Japan's Shintaro Ikeda and Reiko Shiota who are seeded 15th in the tournament.
Adcock said: "We played the Japanese pair at the All England and we beat them. We can go to that match with confidence but we don't take anything for granted."
Adcock then teamed up with Andy Ellis in the men's doubles but fell to Korea's 5th seeded pair of Ko Sung Hyun and Yoo Yeon Seong 18-21 21-13 21-13.
Denmark's Mathias Boe and Carsten Mogensen (pictured left), the second seeds in the men's doubles, sounded a warning with a 21-5 21-10 demolition job on Canadian duo Adrian Liu and Derrick Ng.
Boe said of the hall: "The first match in a new arena is always difficult. It's nice to play here and get used to the surroundings."
The top European pair will play Japan's 9th seeds Hirokatsu Hashimoto and Noriyasu Hirata for a quarterfinal's spot.
To view full results of the 2011 Yonex BWF World Badminton Championships, click here.