The 30-year-old American adds the singles gold medal to her 14 Grand Slams, while Sharapova, also looking for the Golden Slam, had to settle for silver.
The first set was a complete whitewash on Centre Court at Wimbledon, as Williams won the opening eight points to take a 2-0 lead before breaking Sharapova's serve twice more as the set came and went - 6-0 in just 30 minutes.
Serena moved ahead by an early break again in the second before showing strong resolve by saving two break-back Sharapova points at 3-1 and holding serve.
In the next game Sharapova began with a pair of double faults before slumping to 0-40, taking her second break point to move within a game of the match.
The American, arguably in the form of her life, didn't falter, sealing the gold in just over an hour with her ninth and 10th aces of the match.
The result is the most lopsided women's singles final in the history of Olympic tennis.
Williams has now won both the singles and doubles Golden Slams, having won gold with her sister Venus in both Sydney 2000 and Beijing 2008.
The Williamses are still in the doubles competition of this year's Olympics and have a semi-final against the Russians Maria Kirilenko and Nadia Petrova later today.