Alcaraz fell to his back and cupped his hands to his face, rolling over before jumping up to offer a hug at the net to Ruud.
It was a battle between two of tennis' new stars and the first set suggested a battle of attrition from the outset.
Alvarez came out fast, hitting 13 winners in the opening set but was taking risks, hitting 12 unforced errors. It did not matter too much, the Spaniard breaking Ruud in the eighth game to win the set 6-4.
This was the Spaniard's first grand slam final and he was aiming to become the sixth teenager to win a grand slam in the Open Era - the first since Rafa Nadal. On the other side of the court, Ruud has tasted this stage before in 2022 at Roland Garros and he fought back to take the second set 6-2, making the most of his powerful forehand.
The third set was big for both players, and they both played their best tennis here as the crowd grew more and more into the contest.
Given the importance of it, a tie-break was inevitable and Alvarez prevailed, surging to a 7-1 lead, restoring his one set advantage.
From there, the Spaniard didn't look back, breaking Ruud's serve for the second time in the match before serving for the fourth set at 5-3.
Nerves looked to creep in as he netted a simple smash when needing just two points for the championship, but his serve got him over the line, hitting an ace to win the match and the title.
The electrifying Alcaraz, who thrilled fans over the two-week tournament in New York with his acrobatic shot-making, youthful vigour and late-night finishes, replaced Russian Daniil Medvedev (26) at the top of the rankings.
Alcaraz is the youngest-ever world number one since ATP rankings began in 1973. Ruud moves up to number two in the world.
Check out all the stats from an historic night in New York with Flashscore.
