The opening few games showed what the New York crowd were about to witness, with both players struggling to assert any dominance during their service games.
Williams was particularly struggling and her inability to consistently get her first serves in play gave Kerber a crucial advantage and she made no mistake to take the first set 6-2.
Kerber broke the serve of Williams in the first game of the second set but the experience of Williams meant the match was far from over.
The two-time champion fought back later in the set with a break of her own to keep herself within touching distance of her opponent.
A poor service game from Williams late in the set opened the door for Kerber but the 24-year-old failed to take the opportunity with the American immediately breaking back.
Williams managed to make the breakthrough at the crucial time to level the scores with a 7-5 set triumph.
Kerber suffered after throwing away the chance to finish the match in the second place and her sloppy play allowed Williams to take charge in the decider.
The former world number one finally managed to produce some of her usual high quality of tennis to edge ahead of Kerber but a recurrence of her earlier poor serving allowed the German to serve for the match and she held her nerve to claim a dramatic victory.