As Radwanska struggled with a knee injury, Pennetta cruised to a 6-2 6-1 victory in less than an hour and a quarter in the Californian desert.
Better known as a doubles player, Pennetta had contemplated retiring last year after tumbling down the world rankings, but the veteran Italian has rediscovered the fountain of youth.
She reached the semi-finals of last year's U.S. Open and has now won one of the biggest events outside the four grand slams.
"Today was my day and I really enjoyed this moment," Pennetta said at the trophy presentation.
"After so many years of working hard, this is the best moment."
Radwanska went into the match as a slight favourite but was unable to play near her best because of a knee injury that severely restricted her movement.
She called for a medical timeout early in the second set and struggled to control her emotions at the ceremony.
"I'm sorry I could run as much as I could," she sobbed.
"But I had a great week, it was my first final here.
"It's disappointing to lose but Flavia was just playing too good today."
Pennetta beat rising American Sloane Stephens in the quarter-finals and Australian Open champion Li Na in the semis and was never in trouble against Radwanska.
She chalked up 20 winners and saved both break points she faced as she claimed the 10th singles title of her career and her first in four years.
"I'm so happy," she said. "Last year I was thinking I can't play any more, and now I'm here with the trophy."
- Sports & Recreation