2010 Indian Wells champion Jelena Jankovic, 30, looked in control after winning the first set with three breaks of serve and breaking early in set two.
World No 3 Simona Halep, 23, broke the Serb four times in a second set that saw six successive breaks.
The decider was also dominated by breaks of serve with four in a row but Simona Halep held at 3-3 and recorded the 18th break of the match to win it.
“Simona was unbelievable,” said Jelena Jankovic.
“We were running like two dogs and in the end I couldn’t keep up any more. She’s the younger one.”
Simona Halep, who received a bye to the final after Serena Williams pulled out of their semi-final with an injury, was expected to be fresher, having had three days off.
But it was Jelena Jankovic who began more aggressively, breaking in the opening game.
Simona Halep broke back immediately but two more breaks by Jelena Jankovic saw her wrap up the first set.
The second set was a topsy-turvy affair with the players exchanging six breaks of serve before Simona Halep held and broke Jelena Jankovic to level the match.
The momentum seemed to be with the Romanian with a tiring Jelena Jankovic repeatedly looking to her coach for inspiration.
The former world No 1 broke fortuitously in game three when a backhand clipped the top of the net and landed in.
That sparked another flurry of service breaks that saw the score move on to 3-3.
Eventually Simona Halep held and then broke Jelena Jankovic’s serve to lead 5-3 but the Serb summoned up enough energy to hit back in the next.
However, fittingly, the match ended with another break.
A ninth double fault gifted Simona Halep three Championship points and she powered a forehand down the middle of the court to wrap up the biggest win of her career in two hours and 37 minutes.
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