A ringside physician stopped the fight after checking on Kessler (left)
Andre Ward claimed the WBA super-middleweight title with a unanimous technical decision over Denmark's Mikkel Kessler in Oakland, California.
A ringside physician stopped the fight midway through the 11th round after looking at a growing cut on Kessler's face, caused by a head butt.
"I'm dreaming," said Ward, the former Olympic light-heavyweight champion.
"I can't compare this to winning the gold medal, because it's going to take a while for it all to sink in."
Kessler had been installed as favourite prior to the start of the Super Six Classic tournament, which matches six of the world's top super-middleweights.
Everyone said we got the bad draw, but we just beat the toughest guy
The 30-year-old Dane had won his past three fights since his only loss to Joe Calzaghe in 2007, briefly relinquishing the WBA title he has held since 2004, and was confident enough to fight in the United States for only the second time in his career.
But Ward, who won Olympic gold at the Athens Games in 2004, turned the fight in the fourth round with an uppercut that rocked the more aggressive Kessler and opened a cut on his face.
The 25-year-old American then took charge, repeatedly landing combinations and keeping much busier than Kessler, opening a cut above the Dane's left eye in the middle rounds.
Kessler struggled against the American's busy style, and Ward began hurting him repeatedly. Two judges scored the bout 98-92 in favour of Ward, with the third awarding it 97-93.
"I felt like it was my time," said Ward. "Everyone said we got the bad draw, but we just beat the toughest guy.
"I was not intimidated by Kessler's record. I was surprised that he didn't change up at all. He kept doing the same thing over and over."
Ward acknowledged there were two head butts which contributed to Kessler's injury, but said they were accidental, insisting: "I'm not a dirty fighter, everybody knows that."
However, Kessler was angered by his opponent's tactics and adamant he could have fought on.
"He was the better man tonight, but I would have liked the fight to go another minute," said Kessler. "I knew I could have continued. I was cut, but the cuts weren't that bad.
"He threw a lot of elbows and there were a lot of head butts. He never got any warnings. I don't want to sit here and complain all the time, but I wasn't happy with the referee."
Kessler's camp was upset even before the fight about the selection of California-based referee Jack Reiss, asking for an official from a "neutral territory", as mandated in the Super Six contracts.
After the fight, Kessler and his camp criticised Reiss for allowing too much holding and inside fighting, leading to head clashes.
"Without taking anything away from his win, the referee helped him from the first minute," said Wilfried Sauerland, Kessler's promoter.
"He used his head, he used his elbow, and he didn't even get a warning. That was a bit much."
The bout was the third fight in the tournament, which also involves Nottingham's WBC champion Carl Froch.
Froch edged past American Andre Dirrell in his tournament opener last month, while Germany's Arthur Abraham knocked out another American in Jermain Taylor.