Gustafson led the nation in scoring for the second consecutive season and is the first player from the school and the Big Ten to win the award.
"She's an amazing young woman who left an incredible legacy at this school," Iowa coach Lisa Bluder said.
The 6-foot-3 star received 15 votes Thursday from the 28-member national media panel that selects the weekly AP rankings. Balloting was done before the NCAA tournament.
The Iowa staff surprised Gustafson that she had won the award by slipping in a note while she was reading letters from fans.
"I was not expecting it at all. I love my coaches, and they've been so supportive of me," Gustafson said. "It's been an incredible ride. I'm in a little bit in shock right now, really excited to have represented Iowa."
Gustafson averaged 27.9 points per game and helped the Hawkeyes reach the Elite Eight for the first time since 1993. She became only the fourth Division I player to score more than 1,000 points in a season, set an NCAA record with 412 field goals and tied the NCAA mark for double-doubles in a season with 33. She shot 69.7 percent from the field this season and finished her career by making nearly 66 percent of her shots.
Mulkey has led the No. 1 Lady Bears to a 35-1 record and a spot in the Final Four. She was presented the award Thursday after receiving 17 of the 28 votes.
"Listen, any award that I receive, you know good and well that goes back to the kids you coach, period," Mulkey said. "We are only as good as those kids on that floor, and I've been blessed to coach numerous great players. And I would trade any award for every one of them to experience a national championship. Let's get that straight.
"But at the end of the day, that award brings recognition to the program, to the players and to the school first. And what it does for me, it just gathers dust that I have to get a little cloth and dust off. But I'm humbled. It can go to so many people. You just want to be relevant, and you want to just give these kids an opportunity to experience a Final Four and a national championship."
Wes Moore of NC State and Vic Schaefer of Mississippi State each received five votes, and Iowa's Bluder had one.
Mulkey also won the award in 2012, the last time the Lady Bears reached the Final Four and won the national championship. She said she has grown as a coach since that last Final Four experience.
"You know when to laugh more, and you know to cut up with them more and when to be serious," Mulkey said. "It's your job as a coach to figure out those personalities and what motivates them and make sure that you've got great leadership in that locker room."