Alinghi won the America's Cup to become the first European team to defend sailing's most prestigious prize.
Alinghi fans celebrate their team's win in Valencia
The Swiss syndicate beat Team New Zealand in a nail-biting seventh race to seal the best-of-nine series 5-2.
Alinghi finished two seconds ahead of the Kiwis after SUI 100's sail fell off and left them at a standstill.
NZL 92 took advantage but had to perform a penalty turn before the finish after encroaching on Alinghi's run-up for the third mark.
The Kiwis performed the double-tack manoeuvre impeccably but by the time they had finished, Alinghi had regained enough speed to just edge their bow ahead for a thrilling win.
Tuesday's race was a heart-stopping end to the best-of-nine series with the boats hardly more than a boat length apart for most of the race.
The turning point came at the top of the second upwind leg when Team New Zealand got enough advantage to 'dial down', turning downwind and attacking Alinghi nose on.
The crew, the designers and the shore team have done an incredible job throughout the series
Alinghi skipper Brad Butterworth
Alinghi had to swerve to miss them and the umpires slapped New Zealand with a penalty.
Coming back downwind, Alinghi had more problems with their gybes and suddenly the pole that holds out the bottom corner of the spinnaker jumped off the mast, the kite went flying off and the 24-metre yacht came to a halt.
New Zealand swept past the stalled Swiss boat and did a double tack to pay their penalty.
Alinghi finally got a jib up and started chasing for the finish line, caught up with the Kiwis and just got ahead.
"This is a fantastic day for Alinghi, to win the America's Cup again after four years of hard work," said Alinghi tactician Brad Butterworth.
"The crew, the designers and the shore team have done an incredible job throughout the series, we have fought hard against a strong challenger and have won.
"A lot of people thought we wouldn't be able to do it, that we'd suffer for not being in the Louis Vuitton Cup, but this is down to our strength as a team."
"What a devastating way to lose," Grant Dalton, the Kiwis' managing director, said.
"We are crushed by this. We wanted to win so much, but hats off to Alinghi. They made the fewest mistakes and they won the Cup."
Alinghi join Team Dennis Conner and Team New Zealand as the only crews in Cup history to win as a Challenger and Defender.
Alinghi, who brought the Cup to Europe for the first time since its inception in 1851, now have the right to organise the next event where, when and how they want.