The 17-year-old also became only the second Russian woman to win a Grand Slam title, less than a month after Anastasia Myskina became the first at Roland Garros.
In the Open era, only Martina Hingis was younger than Sharapova when she won the women's singles title. The Swiss was 16 when she beat Jana Novotna in 1997.
Playing in her first Grand Slam final on Saturday, Sharapova showed no early nerves and drew first blood by breaking the defending champion's serve to lead 3-1 after Serena ballooned a backhand long.
Serena, 22, was seeking her third successive Wimbledon singles crown but was unable to cope with the brute force of the 17-year-old's groundstrokes.
Sharapova broke again for 5-1 with a searing backhand winner and kept her composure to take the first set on her fourth
With both players troubled by the gusty wind, Serena thought she had wrested away the initiative when she broke for 4-2 but Sharapova defiantly broke straight back.
In a epic ninth game, Serena grittily saved three set points but Sharapova secured the decisive break when the American slipped and hooked a forehand out.
The fearless Russian then completed an astonishing victory on her second match point when Serena netted a forehand and she greeted her triumph by collapsing to her knees in tears in disbelief.
Sharapova's victory is the first for a non-American in the women's final since Czech Novotna in 1998, which is also the last year neither Venus or Serena held one of the four Grand Slam titles between them.