The 24-year-old US southpaw Rodriguez, knocked down by Estrada for the first time in round six, answered late in the seventh with a devastating left to the body that crumpled Estrada and left him writhing on the canvas before referee Chris Flores counted him out.
"I got him with a good body shot," Rodriguez said. "I saw the way he was rolling on the floor. I knew that was it."
Rodriguez improved to 20-0 with his 13th knockout victory while Estrada, 34, fell to 44-4 with the loss at Phoenix, Arizona.
"I've not felt a punch like that since my amateur days," Estrada said through a translator of the knockout blow.
Rodriguez, a former flyweight and super flyweight champion, gave up his title at 112 pounds to move up to the 115-pound division and challenge Estrada.
"It was a tough fight," Rodriguez said. "I got dropped for the first time. That was crazy. I just got caught with a punch and the next thing you know I was on the floor.
"I know it was bad, but I've always pictured myself in a fight like this and in the ring with a legend and to take his best, it makes it that much more better."
Estrada entered on an eight-fight win streak, his most recent bout coming in December 2022 when he won the superfly crown with a majority decision over Nicaragua's Roman Gonzalez.
The dethroned champion called for a rematch, which is in his contract.
"I know the mistake I made in there and I want the rematch. What I need to do in the next fight is box a little bit more," Estrada said.
"He's a great fighter. I didn't underestimate him. I made some errors in this fight and I want to put them right in the second one.
"There's no doubt we'll win that rematch."
Rodriguez caught Estrada with a hard right to the jaw in the first round and countered the champion's body punches in the second to set the early pace.
Rodriguez stunned Estrada in the third round with a right hook to the jaw and in the fourth round knocked the champion to the canvas with a left uppercut followed by a straight left hand.
"He didn't really know what to do when I was on the outside. I just stuck to the game plan and it worked out," Rodriguez said.
'Now I know'
A punishing left uppercut by Rodriguez staggered Estrada with a minute remaining in the fifth but the Mexican stayed on his feet to the end of the round despite a flurry of punches by the challenger.
Estrada answered with a hard right hand to the chest of Rodriguez in the early seconds of round six that planted the American on his rear as the crowd roared.
"I got a little careless. That's why I got dropped," Rodriguez said. "I always wondered what it felt like. Now I know. I don't want it to happen again."
Rodriguez would like to unify the 115-pound titles.
"Definitely. It's something I've seen other fighters do and just to see them with all the belts, it's motivating," he said.
"It's on to bigger things from here... I am taking over this division."
