The American, who won her first title at Roland Garros in 2002 against sister Venus Williams, out-hit Sharapova, who was looking to become the first woman since Justine Henin in 2004 to successfully defend her title in Paris.
The defeat also means Sharapova will lose her world number two ranking to Victoria Azarenka when the new rankings are released on Monday.
But the day belonged to Williams.
"It was very difficult," she said. "After 11 years it's incredible. Thank you to the crowd. I want to come back here and win again. I think I'm Parisienne."
Sharapova said: "She's been playing so well throughout the year and throughout the tournament. Congratulations to her. This court has brought me so many nice memories - last year was so special. I'll be back next year to try to win again."
Sharapova had received a battering at the hands of Williams in the Madrid final just a few weeks ago and it looked as though the Roland Garros final could follow suit when the Russian quickly found herself three break points down in the opening game.
Sharapova battled back with some quality serving to hold from 0-40 down before breaking the Williams serve in the second game to get off to a lightning quick start.
For all the talk of Williams being the overwhelming favourite heading into the match, Sharapova clearly had a specific game plan and was determined to do anything she could to change a run of 12 straight losses to the American before this final.
But it was a slow start from Williams and once she hit her stride in the third game, it took most of Sharapova's energy just to stick with the American.
Williams broke back immediately in the third game, with a smash winner, before sneaking ahead with a second break in the fifth game when a brutal forehand return of serve forced a forehand error from the Russian.
Sharapova did get the break back in the eighth game, pushing Serena wide on four consecutive points and drawing the error from the American's forehand on all four of them.
But once again Williams broke again in the very next game, an angled forehand winner across court doing the damage this time, before serving out the set at the second time of asking when Sharapova went wide with a backhand.
The second set was slightly more straightforward, Williams breaking early - again in the third game - and the American's relentless pressure eventually proved too much for Sharapova as she sent a forehand long down the line.
And this time that one break proved enough. Although Williams threatened to break again in the ninth game, Sharapova held firm to deuce to force the American to serve it out.
Credit should go to Sharapova who produced a lesson of her own in displaying all the best battling tennis and 'never give up' attitude she could muster.
But in the end Williams was simply too strong and sealed victory with her 10th ace after one hour and 46 minutes.