The American weathered the storm after Henin sent the match into a deciding third set to wrap up victory after two hours and seven minutes and retain the title she won last year.
“It was a great final and it could have gone any way,” Williams said after receiving the Daphne Akhurst Memorial Cup from Margaret Court, who won a record 24 grand slam singles titles.
Both players were suffering from nerves at the start then battling exhaustion at the end but still managed to provide the packed Melbourne Park centre court crowd with some exquisite shotmaking and intense drama in their first grand slam final meeting.
Williams, wearing a citrus-coloured outfit, thumped down 12 aces and 32 winners while Henin provided a reminder of the form that earned her seven grand slam titles, including the 2004 Australian Open, with 28 winners of her own.
“It was definitely a tough match mentally and physically,” she told a news conference.
“I felt like we both were out there trying to kind of prove something. I think we both did at the end of the day.”
Despite the loss, it was a personal triumph for Henin, who only returned to the professional circuit this month after quitting the game in May 2008.
