Djokovic lost all three matches on his Masters Cup debut last year
World number three Novak Djokovic produced a magnificent display to beat Nikolay Davydenko in Shanghai and win his first Masters Cup title.
The Serb went into the match after a week of mixed displays but was back to his very best as he won 6-1 7-5.
He dominated with his forehand and Davydenko could not rediscover the form that beat Andy Murray in the semis.
Djokovic adds victory in the season-ending event to his first Grand Slam title at January's Australian Open.
"I'm very, very happy," he said. "It's a great achievement for me.
"The best eight players playing here says everything about the quality of the event and I would definitely put it on a level with the Grand Slams."
The title clearly meant a lot to the 21-year-old, who lost all three matches on his Masters Cup debut last year and had not won a tournament since Rome in May.
Certainly I believe that I have the quality to reach the top spot in the upcoming year or next couple of years
He had only been at his best in patches on his way to the final in Shanghai, while Davydenko had got stronger and stronger after losing to the Serb in the group stages on Tuesday.
But any suggestion that Djokovic was the underdog was blown away in the opening moments of the final.
As Davydenko struggled to find his range from the baseline, the previously erratic Djokovic forehand was suddenly back to being the weapon that won him a Grand Slam crown.
Djokovic broke serve twice and moved 5-0 clear in a blistering game that included a sublime forehand lob before Davydenko finally got off the mark.
The Russian then earned two break points, but an error and a big Djokovic serve got the Serb out of trouble and he took the set with a cross-court backhand winner.
A crushing win looked on the cards when Davydenko gave up another break in game three of the second set, throwing in a poor smash and a double fault before Djokovic made him pay with a rasping forehand winner.
The second seed missed a chance for the double-break in game five and saw two match points go begging at 5-3 when Davydenko fired an ace and a forehand.
That looked to be a key moment when Djokovic failed to serve out the match in a nervous game, double-faulting on the second break point for 5-5.
But the pressure then shifted to Davydenko and the Russian faltered, two unforced errors handing the break straight back.
This time Djokovic was not going to let the chance slip by and he took the title with a love service game rounded off with a big serve down the middle.
Against Djokovic you need to be perfect and also play very fast and very well. That's what he did, and I didn't
"It's not easy, you know," he said. "There is a lot of pressure involved.
"It's very important after not closing out the match to hold your nerves, and that's what I did."
The victory sees Djokovic close within 10 points of world number two Roger Federer in the rankings, and the Serb aims to become world number one in the years to come.
"Certainly I believe that I have the quality to reach the top spot in the upcoming year or next couple of years, (maybe) 10 years," he said.
"That is my lifetime goal that I've been always trying to achieve. But I have learned a lesson. If I pay too much attention to rankings, it doesn't go the right way."
Davydenko said: "Against Djokovic you need to be perfect and also play very fast and very well. That's what he did, and I didn't.
"Normally I play very fast and have very good control and today I didn't. Djokovic played very well. For me I think today was a very difficult day."
Daniel Nestor of Canada and Serbia's Nenad Zimonjic beat Americans Bob and Mike Bryan 7-6 (7-3) 6-2 to win the doubles title and clinch the number one ranking.