The Yahama rider was beaten by home favourite Casey Stoner, who won on home soil for the sixth time in succession, but the Australian's Repsol Honda team-mate Dani Pedrosa, the only man who could deny the Spaniard the title, crashed out.
Britain's Cal Crutchlow finished third.
Lorenzo's second place helped him win back the title he first claimed in 2010 with one race of he season remaining.
Lorenzo, who went into the race with a 23-point advantage over Pedrosa at the head of the standings, started from second on the grid, but got the jump on pole-sitter Stoner into turn one.
Pedrosa, starting third, was hot in his rival's tail after also passing the Australian, who will retire at the end of the season.
The Spaniard soon passed Lorenzo and Stoner moved up to second on the home straight heading into lap two, but Pedrosa then paid the price for pushing to hard as he lost control of the back of his bike.
He was able to get back on, but the bike was too badly damaged and he was forced into the pits.
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That left Lorenzo just needing to avoid any mistakes to take the title.
Stoner, looking to sign off in front of his home fans in style, pulled away to win by more than nine seconds ahead of Lorenzo.
Crutchlow won an entertaining battle for third place to take his second podium-finish of the season, with Italy's Andrea Dovizioso and Spain's Alvaro Bautista fourth and fifth respectively.
Lorenzo described the title win as "so sweet".
He told BBC Sport. "I've been very patient and concentrating hard for so long and now the title has come.
"I was nervous in the last few laps. I almost crashed in turn two, but I brought it home."
Pedrosa added: "I was trying hard to win. Sometimes it goes your way, sometimes it doesn't."