It was the first time that four drivers had entered the last race of the season with the possibility of finishing top overall. Sebastian Vettel, 23, started from pole position, followed by McLaren's Lewis Hamilton and Ferrari's Fernando Alonso.
All three, plus Vettel's Red Bull teammate, Mark Webber, had been in contention for the drivers' champion title.
Alonso had the best chance to secure the honor for a third time, with the most points going into Sunday's race, but was passed early by Jenson Button of McLaren, who started from fourth on the grid.
In the end, Button crossed the finish line third, approximately one second behind Hamilton.
Alonso and Webber finished seventh and eighth respectively.
Vettel said he was proud to pull off the win.
"The race went phenomenally well. The car was enjoyable every single lap," he said.
Abu Dhabi hosts the only sunset grand prix that begins in daylight and ends under floodlights at night. Vettel won the inaugural race last year, but says his latest victory is much more difficult to comprehend.
"I guess it will sink in when I finally go to sleep, but I think we'll have daylight before that happens," Vettel joked.
Analysts say this year's nail-biting season finale is likely to attract more fans to Formula 1 following a slump in viewing figures last year. The number of global viewers reportedly fell by more than 80 million in 2009.
In a recent interview with the Associated Press, Formula 1 executive Bernie Ecclestone described 2010 as "fantastic" for racing fans. Vettel agrees.
"I think we have seen incredible, incredible fights and a tight season," he said. "I don't know how many times we had a different leader in this championship."
Lewis Hamilton, the 2008 world champion, was leading the standings for a while. His McLaren team had mixed results throughout the season, but he says he is happy with the way 2010 has ended.
"I think for us, it was a great end-of-season result for me and Jenson. I think we pushed very hard throughout the year…next year will be a better year," Hamilton said.
Button says the team is already looking forward to 2011.
"This is my first year with the team and I've had a great season," Button said. "I really feel at home and I think that the experience that we've gained this year, Lewis and myself, with working closely with the engineers and everyone within the Vodafone McLaren Mercedes team, we can really build on this season for next year. We're going to have a little break now, but then we'll be back on it."
Sebastian Vettel ends the year with 256 points, followed by Fernando Alonso with 252 and Mark Webber with 242.
Lewis Hamilton finishes fourth overall with 240 points.