Wales had looked on course for victory in their maiden final after going into half-time with a 15-3 lead following two Ashley Evans tries, but England hit back to take the title at Stade de la Rabine in Vannes, France.
The victory sees England lift the trophy for the first time after finishing as runners-up to New Zealand in 2008, 09 and 11.
New Zealand had won the first four finals before losing to South Africa in last year's final and seeing their challenge this year ended by England at the semi-final stage.
Wales, whose previous-best finish was third 12 months ago, opened the scoring when Evans gathered a kick from fly-half Sam Davies, the IRB Junior Player of the Year, to touch down in the corner.
The conversion was missed but, after Davies and Henry Slade swapped penalties, Wales added a second try to make it 15-3 after just 13 minutes, Evans again the man going over following an interception.
England were unable to cut into that deficit before the break, Tom Price seeing a try ruled out in incident that saw his team-mate Dominic Barrow sent to the sin-bin, and it was Wales looking in total control going into the second period as they sought their first win over England at Under 20 level.
However, England, despite the loss of Barrow just before half-time, turned things round in superb fashion with full-back Jack Nowell going over to reduce the deficit in the 58th minute.
Sam Hill then crossed to help his side level things up at 15-15 and the boot of Slade did the rest as England took the title.
South Africa beat New Zealand 41-34 in an entertaining third place play-off.