Falcao walked down Shlemenko in the early stages of round one, trying to get his clinch going and working for the takedown, but it was Shlemenko who secured the outside trip and ended up in top position.
After being inactive, the referee stood the fighters up. They clinched for position against the cage with Shlemenko's strength showing.
Falcao came out busy in round two, but Shlemenko quickly poured on the heat, landing knees from the clinch of a tiring Falcao.
Shlemenko landed a big body shot on Falcao, who was clearly hurt and after being stunned with a short right hand, he fell to the mat.
Shlemenko landed more shots to the body and as Falcao went to cover up the body, Shlemenko knocked him out with strikes to the head.
“I am the champion of Bellator. I am face of Bellator now,” Shlemenko said post-fight. “Who wants belt? Come in cage. I am beat you.”
The victory improved Shlemenko's record to 47-7 and increased the Russian's unbeaten streak to 10 fights.
In the co-main event, Brazilian Marlon Sandro progressed to the final four of the featherweight tournament with a controversial majority decision win over Akop Stepanyan, with the judges scoring it 29-27, 29-27, and 28-28.
In a tight first round, both fighters started off patiently with Stepanyan getting the better of Sandro with the stand-up. The Brazilian was able to secure a late takedown, but ran out of time to do any damage.
Sandro scrambled for a takedown straight off the bell in round two, but was caught with a spinning back kick and was on the ropes before being clipped with another kick.
Sandro again worked for a takedown, remaining active from his back, but referee George Allen stood Sandro back up after Stepanyan returned to his feet.
Sandro secured another late takedown and looked for a leglock, but again ran out of time.
Before the start of round three, referee George Allen announced that Stepanyan had been deducted a point for holding the cage in the second round after being previously warned.
Sandro secured an early double-leg takedown, but the referee stood the fighters back up. Stepanyan went for another spinning back kick, but was taken back down with Sandro controlling the fight from the top position until the final bell.
With most people expecting the fight to go into a fourth and deciding round, they were left shocked when two of the judges awarded the decision to Sandro, who will take on Magomedrasul Khasbulaev for a place in the featherweight tournament final.
Bellator 88 results:
-Alexander Shlemenko def. Maiquel Falcao via KO (Punches), Round 2 at 2:18. -Marlon Sandro def. Akop Stepanyan via Majority Decision (28-28, 29-27, 29-27). -Mike Richman def. Mitch Jackson via TKO (Strikes), Round 1 at 4:57. -Alexandre Bezerra def. Genair Da Silva via Submission (Armbar), Round 1 at 1:40. -Magomedrasul Khasbulaev def. Fabricio Guerreiro via Submission (Arm Triangle), Round 2 at 1:15. -Joe Elmore def. Jerrid Burke via KO (Punch), Round 2 at 4:11. -Ronnie Rogers def. Shane Crenshaw via Unanimous Decision (29-28, 29-28, 29-28). -Clay Harvison def. Ururahy Rodrigues via TKO (Knee), Round 3 at 3:34. -George Hickman def. Stephen Upchurch via Submission (Rear Naked Choke), Round 1 at 2:19.