In the run-up to the announcement at the party conference in Torquay, a seaside resort on Britain's south coast, there was an air of slight trepidation. "And the only way I could really find anything out was by joining one of them, and I wasn't going to join the Conservatives or the Labour Party and it was a simple case of going for the one in the middle, which was the Liberal Democrats".
Based in Folkestone, the former soldier and police officer was considered to be a front-runner in the contest and had seen the odds on him winning fall dramatically in recent weeks. She came second, with Bolton gaining over 1,000 more votes than her.
The emergence of Ms Waters as a candidate in August prompted MEP Mike Hookem to resign his position as party whip in protest, with the MEP stating that he could not "turn a blind eye" to her "extreme views".
"We're leaving the European Union because we as a nation want that right of self-determination".
Speaking immediately after the announcement, Bolton said pressuring Theresa May's government into a hard Brexit will be UKIP's "core task" under his stewardship. UKIP's finances are shaky, with some party staff working on reduced salaries in order to keep the organisation functioning.
Dudley councillor Paul Brothwood added: "I am extremely pleased that the membership have rejected Anne Marie Waters and Peter Whittle, who were intent on taking the party in a very unpleasant direction".
Mr Goldsmith died soon after the 1997 election, creating political space for Ukip after his Referendum Party was dissolved. Bolton reportedly said he was "fine" with the new design.
Bolton has become the fourth leader of UKIP in the last 12 months.
The party has been riven by splits and disagreements, one of which resulted in MEP Steven Woolfe being taken to hospital after a fight with another Ukip MEP. "I abhor the rhetoric that we are at war with Islam".
New leader Paul Nuttall left in June after failing to win a parliamentary seat in a general election.