Despite a slow start to the year with one win in the first five rounds, Essendon finished on top ahead of Carlton, by only 1.5 per cent.
The Bombers experienced a close call in the preliminary final when they overcame a 42-point deficit at half-time against Adelaide and went into the Grand Final against the Blues as underdogs.
But Essendon stunned its fierce rival, leading at every turn and increasing the margin as the game went on.
The Bombers won by 44 points, with Paul Salmon booting five majors.
Essendon 5.8 10.9 16.11 20.13 (133)
Carlton 1.2 5.2 10.5 13.11 (89)
Best: Long, Mercuri, O'Donnell, Salmon, Thompson, Harvey
Goals: Salmon 5, Mercuri 3, Hird 2, Long 2, Harvey, Wanganeen, C. Daniher, Bewick, Wallis, Misiti, Denham, Calthorpe
Norm Smith Medal: Michael Long
B: Gavin Wanganeen, Dustin Fletcher, Dean Wallis
HB: David Grenvold, Mark Harvey, Mark Thompson
C: Ricky Olarenshaw, Sean Denham, Paul Hills
HF: Mark Mercuri, James Hird, Joe Misiti
F: Tim Watson, Paul Salmon, Michael Long
R: Peter Somerville, Gary O'Donnell, Darren Bewick
I: Chris Daniher, David Calthorpe
Coach: Kevin Sheedy
Captain: Mark Thompson
Average age: 24
Average games: 86
Best and fairest: Gary O'Donnell
Leading goalkicker: Paul Salmon (65)
Brownlow Medal: Gavin Wanganeen
All Australian: Gavin Wanganeen, Mark Harvey, Kevin Sheedy (coach)