The days leading up to the race saw an upbeat Rosberg talking openly about how he fully intended to make Hamilton crack under pressure.
That resulted in the onus to deliver falling on Rosberg — Hamilton's childhood friend and teenage go-karting rival — and match his pre-race fighting talk with equally aggressive driving.
It never happened, and the German driver's dismal race saw him place a lowly 14th after he failed to recover from a poor start.
Hamilton, the 2008 F1 champion, entered the race with a 17-point lead over his rival, needing only a top-two finish to guarantee the title.
But he was never even tested and the highly anticipated duel under floodlights never happened.
"Woooooo-hoooooo, world champion I can't believe it! Thank you so much guys," Hamilton screamed over race radio, before grabbing a Union Jack flag and waving it above his car as his mechanics celebrated wildly.
"It's hard to soak all of this up. So much pressure," the 29-year-old Hamilton said. "I didn't sleep last night. I went for a run and had a massage, I thought I would be tired, but somehow I felt composed for the race."
He kept his helmet on for several minutes, appearing to wipe away tears, as the emotion of his hard-fought championship win started to sink in.
"This has been an incredible year," Hamilton said. "It feels very surreal, like an out-of-body experience, like it's not really happening."
Standing watching in the Mercedes garage, Britain's Prince Harry told him he was a "legend" and the emotion got to Hamilton, who described how he sat on a beach the night before the race, texting his father, Anthony Hamilton, and urging him to attend the race.
The elder Hamilton responded to his son's call.
"One thing I want to say is a big huge 'Thank You' to all the fans, to my family. I love you guys," Hamilton said. "This is the greatest day of my life — 2008 was a special day but this is way, way beyond that."
As a dejected Rosberg climbed out of his car, Hamilton rushed over to hug his girlfriend Nicole Scherzinger, who was in tears as she gave him a kiss.
Rosberg started from pole position and, with double points on offer, could have won the title providing Hamilton finished third or lower.
"It is a pity it did not work out," Rosberg said. "It's been very intense, a very special weekend for me."
Brazilian driver Felipe Massa crossed the line in second place ahead of his Williams teammate Valtteri Bottas, while Red Bull's Daniel Ricciardo drove superbly to finish fourth despite starting from the back of the grid alongside teammate Sebastian Vettel, who finished eighth.
In total, Hamilton scored 384 points, with Rosberg notching 317 and Ricciardo third with 238.
Although it was a one-sided race, the season was a welcome drivers' contest after Vettel beat Fernando Alonso by 155 points last year. Mercedes, however, crushed the competition out of sight, winning 16 of 19 races and securing 18 poles.
"We said way back in 1997 that it would be amazing if we were fighting for the title one day," Hamilton said. "He just came into the room just now, he was very professional. He said 'Fantastic, you drove really well.'"
Hamilton joins British drivers Graham Hill and Jim Clark with two F1 titles, with only Jackie Stewart ahead of him on three.
He won 11 races to Rosberg's five this season. Tellingly, the German driver failed to make the most of pole position, having bettered Hamilton 11-7 in qualifying.
Hamilton's other title was also decided on the last day, when he did just enough to beat Massa by one point at the season-ending Brazilian GP six years ago.
A repeat scenario was squashed after three seconds.
While Rosberg seemed rooted to the spot, Hamilton showed phenomenal acceleration from the line.
"It was a good start, like a rocket," Hamilton said.
Meanwhile, it was a tough end to Vettel's Red Bull career.
The four-time F1 champion will join Ferrari next year on a three-year deal, replacing Fernando Alonso, who is touted to replace Jenson Button at McLaren.
The Red Bulls started last after race stewards nullified their qualifying results because of an illegal aerodynamic influence on the front wing flaps.
Although Red Bull placed a giant sticker on the garage floor that said "Danke Seb!" ("Thanks Seb!") he was not quite the centre of attention.
Former Spice Girl Geri Halliwell — engaged to Red Bull team principal Christian Horner — was in the team garage.
The 5.554-kilometre (3.44-mile) Yas Marina circuit is built on a man-made island, and the race has a unique feel, beginning at dusk and ending under darkness.
Hamilton and friends, including U.S. singer Pharrell Williams, were likely partying long into the night.Suggest a correction