The 39-year-old Lagat, three times a world indoor champion, surged past Rupp with about a lap to go to claim the win in seven minutes, 46.01 seconds at high altitude in Albuquerque, New Mexico.
"He's still got it," said Olympic 10,000 metres silver medallist Rupp, who ran 7:48.19 to join the Kenyan-born Lagat on the American team for the March 7-9 IAAF world indoor championships in Sopot, Poland.
"The race started quite fast," said Lagat, winner of the past two world indoor 3,000 metres titles. "I was waiting for the moment when Galen was in the top, so that I could keep an eye on all of them.
"All I had to do was watch how they are running and be composed, not to make any mistakes, and to just go (when) I felt comfortable. At 200 metres to go, and that's what I did."
Lagat said he hoped the same strategy would work in the world championships.
"If I run smart and I keep an eye on the guys that are tough - the few Ethiopians I have been watching and the Kenyans - I think I will be safe.
"I'm going to use that strategy I used tonight to make sure that I get the gold medal in Poland."
The time was impressive considering Albuquerque's thin air, which hinders distance runners and aids sprinters and jumpers.
Andrew Bumbalough forced the pace early with Rupp and Lagat hanging back but within striking distance.
Rupp finally took the lead with less than three laps to go before Lagat turned to his closing kick for the triumph as both he and Rupp dodged lapped runners down the final straight.
Ryan Hill finished third in 7:49.62 and Lopez Lomong took fourth, more than seven seconds behind Hill.
Cancer survivor Gabriele Grunewald claimed the women's 3,000, winning her first U.S. title in 9:23.15 as she defeated Olympian Shannon Rowbury by more than two seconds.
The top two finishers in the trials qualify for the world championships provided they have met the IAAF qualifying standards.
Many top American athletes skipped the meeting, taking a break from championship competition because there is no outdoor world championship or Olympics this year.
Nia Ali produced the meeting's only 2014 world leader on Saturday, sprinting 7.88 seconds in the 60m hurdles preliminaries.
Olympic silver medallist Erik Kynard claimed the men's high jump with a clearance of 2.30m on his second attempt.
The trials, which double as the U.S. championships, conclude on Sunday with Jenn Suhr returning to the venue where she set the world indoor pole vault record and teenager Mary Cain competing in the women's 1,500 metres.