Azarenka took a seesaw 4-6, 6-4, 6-3 decision, fittingly finishing the championship with her ninth break of the match.
The win gives Azarenka two Grand Slam titles. It was a victory over Maria Sharapova in the 2012 Australian Open final that moved Azarenka to the top of the rankings for the first time. The win Saturday allows her to keep the No. 1 ranking, which would have gone to Serena Williams had Azarenka lost.
Li falls to 1-2 in major tournament finals. She fell to Kim Clijsters in the 2011 Australian Open title match but beat Francesca Schiavone in winning the final at the 2011 French Open.
Li was the fan favorite throughout Saturday's final, only strengthening the support as she twice was injured in the match. She rolled her left ankle midway through the second set and fell and hit her head hard on the court in the third.
The 2-hour, 40-minute match was decided by service breaks, however. There were a total of 16 in the 29 games.
Azarenka held serve in the game in which Li hit her head to even the final set at 2-2. Azarenka posted a break in the next game and held two more games -- the only time a player had three consecutive holds in the match. She won the final three points of the match, closing the championship when a Li return went long.
The storyline of the match was set right away when both players dropped their first service games. Azarenka didn't hold serve until the eighth game and then kept the set going with a break. Azarenka held off three set points in the 10th game but a double fault handed Li her fourth break and the first set.
Azarenka, won the first three games of the second set -- two on breaks. Li got one of the breaks back but it was in the fifth game that she rolled her left ankle. She won the next five points, claiming a service game and going up 0-40 on Azarenka but Azarenka rallied and held.
Li evened the set at 4-4 but Azarenka, with break No. 7, pulled ahead and, with a rare easy hold, finished off the set with a hold at love sending the match to the third set.