The 26-year-old from Dunblane ended Britain's 77-year wait for a men's singles winner at the All England Club with a 6-4 7-5 6-4 triumph over the current world number one.
Murray played the better tennis during the match but had to fight back from 4-1 down in the second set and 4-2 behind in the third to triumph in three hours and nine minutes.
The final game was a fitting conclusion to a historic occasion, with Murray seeing three match points disappear and then having to save three break points before finally clinching it when Djokovic netted.
Murray raised his fists in celebration before embracing Djokovic then sinking to his knees with his forehead on the grass.
He had done it, and the satisfaction was overwhelming.
The Centre Court crowd and the thousands of people watching outside on the big screen had given him tremendous vocal support, and he high-fived fans in the front row before climbing up to his box.
There he embraced coach Ivan Lendl, his support team and girlfriend Kim Sears. Murray initially forgot his mum, Judy, who was sitting in the row behind, but went back to celebrate with her.
Returning to the court to lift the trophy, Murray's face was a mixture of elation, exhaustion and disbelief.
His emotions were a total contrast to last year, when he had sobbed through his post-match speech after losing the final to Roger Federer.
That match proved a turning point, with the Scot going on to win Olympic gold by beating Federer on the same court four weeks later and then winning his first grand slam title at the US Open.
Murray had said after his semi-final win over Jerzy Janowicz that it would be tough to top those moments, but this was very special.
Murray said: "I also said that winning Wimbledon is the pinnacle of tennis. The last game almost increased that feeling. I worked so hard in that last game.
"Mentally, that last game will be the toughest game I'll play in my career, ever.
"It was a different match to the US Open. Winning Wimbledon, I still can't believe it. I can't get my head around that.
"It was just an amazing finish to the match. I was glad I managed to see all of my team afterwards. They saw what it was like last year after the match. It was a completely different feeling this year.
"This one will take a little while to sink in, I'm sure."
In his post-match speech on court, Murray made special mention of Lendl, who tried so hard to win Wimbledon during his own career but was twice a beaten finalist.
"This one is especially for Ivan as well," Murray said, "because I know he did everything to try to win this when he was playing, and I'm glad I was able to help him out when he was coaching."
The pair spoke afterwards, and Murray said: "He just said that he was proud of me, which obviously coming from him means a lot.
"He doesn't smile in public too much, but when he's away from the crowds and the cameras he's a very different character.
"Obviously ideally he would have won it himself, but I think this was the next best thing for him. I'm saying it seriously.
"I think he believed in me when a lot of people didn't. He stuck by me through some tough losses the last couple of years. He's been very patient with me. I'm just happy I managed to do it for him."
One of the most unpredictable Wimbledons in history saw Murray and Djokovic meeting in a third grand slam final in less than 12 months.
Murray had prevailed in five sets at the US Open with Djokovic gaining revenge at the Australian Open, and the only thing that seemed certain was it would not be a short match.
The first four games took 20 minutes. Murray won the first three points of the match on Djokovic's serve but could not break.
In close matches, such moments can be decisive, but the crowd soon had something to cheer as Murray took his seventh break point to lead 2-1.
In the Australian Open final, Djokovic had not dropped serve once, but the significance was snuffed out as the Serbian hit straight back.
Djokovic was below his exceptional best, though, struggling to hit winners and making unusual errors, his efforts in beating Juan Martin del Potro in five sets on Friday perhaps taking their toll.
Murray broke again to lead 4-3 and then withstood great pressure in the next game before serving out the set comfortably.
It was the perfect start, but 12 months ago he had won the first set against Federer, while in his last three matches against Djokovic he had led by a set only to lose.
Djokovic raised his game and moved into a 4-1 lead in the second set, but back came Murray to level.
The world number one was not taking his chances, missing a point to hold for 5-2 and then seeing a break point for 5-3 go begging.
Murray took advantage of Djokovic's obvious frustration to break for 6-5 and then held serve to move to within one set of victory.
Djokovic looked spent and Murray broke immediately at the start of the third set, but the Serbian's resilience is legendary and he responded with a run of four games in a row.
Had he taken the set, it would have been a very different match but Murray pulled it back to 4-4 and seized his moment to break again and set up the final, dramatic conclusion.
Djokovic was disappointed he had not found his best form this time but hailed Murray as a worthy champion.
"The bottom line is that he was a better player in decisive moments," said Djokovic.
"Both the second and third sets, I was 4-2 up and dropped serve in those games and just allowed him to come back for no reason.
"He was getting some incredible shots on the stretch and running down the drop shots. He was all over the court. He played fantastic tennis, no question about it. He deserved to win.
"I should have played better in the decisive moments. I believed I could come back. I really fought. It wasn't my day."
Djokovic also recognised the significance of Murray's victory on home soil, adding: "It must mean a lot to everybody.
"Wimbledon is the most important tennis tournament in the world. Especially for him as a British player and the crowd, there couldn't be a more perfect setting for them."