The four-time Grand Slam champion edged a captivating final 6-7(6), 6-4, 7-6(3) for his fourth ATP crown of the year and 16th overall.
The Spaniard, who will return to number two in the world behind Sinner, was 3-0 down in the final-set tiebreak only to fight back and win in three hours, 21 minutes.
The longest men's singles match in China Open history ended Sinner's run of 14 victories in a row and saw him deposed as the Beijing champion after an almighty fight.
Alcaraz called it "a special win" that was even more satisfying in light of his shock second-round exit at the recent US Open.
He hopes it will win the sport more fans.
"When Jannik and I play it's a good thing for tennis because we always show a really intense match, really close match, great points, great rallies," he said.
"I think for the people who don't watch tennis, probably thanks to these kind of matches, they will start to watch tennis or even practise it."
US Open champion Sinner reached the final in Beijing under fresh scrutiny.
The Italian has admitted to sleepless nights over his doping case, which was reignited at the weekend when the World Anti-Doping Agency (WADA) said it had appealed against a decision to clear him.
He called it one of the toughest matches he had ever played.
"These kind of matches can really go both ways, but it was not my day," said Sinner.
"He played better in the important moments, that's it."
'Great battle'
In front of a packed house, the early exchanges were nervy with both players under immediate pressure on their service games.
Sinner, 23, was the first to blink, with second-seeded Alcaraz breaking for a 3-1 lead and celebrating with a fist pump.
The Spaniard held easily for 4-1 and had his opponent rattled.
Alcaraz, 21, served for the set but Sinner grabbed the break back when he needed it most.
Sinner then saved set point on his own serve to force the tiebreak, and saved another in the tiebreak before taking the set at his first opportunity when Alcaraz fired long.
It was the first set Alcaraz had dropped all week.
The second set was just as tight.
Both players saw chances come and go but they went with serve until Alcaraz broke for 5-4, before holding with ease to send the final into a third set.
The decider again went to a tiebreak, where Alcaraz finally prevailed on his first match point.
"It was a great battle again," said Sinner, who twice tested positive for a steroid in March but was cleared of wrongdoing and allowed to keep playing.
In August, the International Tennis Integrity Agency (ITIA) accepted Sinner's explanation that the drug entered his system unintentionally when his physiotherapist used a spray containing it to treat a cut and then provided massage and sports therapy to the player.
WADA said on Saturday it had appealed and was seeking a ban of up to two years.
