Leer, who also won the 3,000 meters at last year's indoor championships, was way back in the pack before making his move, charging to third place and then finishing with a stirring sprint to win the famed mile race.
"I kind of just lost track of the laps, you couldn't hear a split," the bearded Leer said after victory in the 107th Millrose Games in front of a noisy crowd of about 5,000 at The Armory.
"It was so loud in here, everybody was going nuts. I was moving up and then all of a sudden I heard ding, ding, ding, ding (for the bell lap) and I said 'I gotta go, I've got a lot left.'"
Lalang, of Kenya and the University of Arizona, held the lead until the last straightaway and finished second in 3:52.88 to set a collegiate record.
Two-time Olympian Willis of New Zealand tried to pass Lalang on the inside going down the stretch but was boxed in by the Kenyan and finished third in 3:53.02.
"Will (Leer) ran a fantastic race," said the gracious Willis. "I just got beaten by a much better runner on the day."
Missing from the race was world silver medalist Matthew Centrowitz, who withdrew due to an upper respiratory problem.
Rising teenage runner Mary Cain won the women's mile in 4:27.73.
Cain, who recently broke her world junior indoor record for 1,000 meters, did not threaten any records after a slow early pace, but saw the race as another step in her development.
"One thing that I struggle with a lot is competing, being in a pack, running with a lot of bodies," said Cain, a local favorite who grew up in nearby Bronxville, New York.
"I'm 17, still not really kind of used to it. So the goal today was to compete and race smart. That's what I did and I'm really happy."
Also beaming was Bernard Lagat, winner of the Wanamaker mile a record eight times, who won the rarely run 2,000 meters in an event named in honor of Finnish great Paavo Nurmi, who set a world record at the distance at The Armory in 1925.
Lagat, who set records at 5,000 meters and two-miles at the previous two Millrose Games, clocked a time of 4:54.74, and said his victory was an homage to the great Nurmi.
"He achieved so much," said Lagat. "To even be mentioned in the same line as Paavo Nurmi, to me that is the greatest honor."
Another world leader for this season was set in the 1,000 meters by Frenchman Pierre-Ambroise Bosse, who won with a time of 2:17.63.
American Wallace Spearmon was a no-show in the 300 metres after having travel problems on another snowy weekend in New York, but the husband and wife Eatons made it to Washington Heights and set personal bests.
Olympic decathlon champion and world record holder Ashton Eaton cleared an indoor personal best 5.35 meters in the pole vault in finishing fourth.
World heptathlon silver medallist Brianne Theisen Eaton finished fifth in the women's 60 metres hurdles in 8.17 seconds for her best time.