Carter, playing in his second Masters final and bidding for a first Triple Crown event win, had led 5-3 at the end of the first session but it would be the Rocket's night as the snooker legend turned on the style on the sport's grandest stage, fighting back after finding himself 6-3 down to secure the crown.
O'Sullivan managed to take three frames in a row to get back on level terms before Carter made his ninth century of the tournament in the 13th frame, breaking the previous record set by O'Sullivan in 2007 and 2009.
From that point on it was ruthlessness personified by O'Sullivan, who punished Carter at every opportunity to limit him to just 51 points in the last four frames as O'Sullivan raced to 10 frames and victory.
O'Sullivan, who became the tournament's youngest-ever winner almost 29 years ago, has now also become its oldest, surpassing Stuart Bingham who claimed the title at age 43 in 2020.
O'Sullivan's victory earns him £250,000 in top prize money, while Carter takes home £100,000 as runner-up.
The world number one, who also won his eighth UK Championship in December, now has the chance to join an elite group of legendary players who have won all three Triple Crown events (the UK Championship, World Snooker Championship and Masters) in the same season, following in the footsteps of Steve Davis, Stephen Hendry and Mark Williams.
Speaking after his victory, O'Sullivan revealed he had to dig deep to win the competition.
"I don't know how I won this tournament," O'Sullivan told BBC Sport.
"I've just dug deep, tried to play with a bit of freedom tonight and just tried to keep Ali honest.
"If he was to win, he would've had to scrape me off the table. I just wanted to see if he had it at the end and could he get over the line, that was my mindset coming into the evening session.
"Ali didn't play great this evening, he played better this afternoon and he let me off the hook tonight.
"He didn't take on some balls I thought he would and that gave me belief."
The defeated Carter jokingly told the BBC he was "getting annoyed" with O'Sullivan's dominance: "He's beginning to annoy me. Obviously I'm gutted I lost. The final, it's all about winning.
"Before I rocked up here I would've taken the final but I've got good things to come for me and I'm heading in the right direction.
"Ronnie played very well, he missed a few at the end and the crowd got excited. When you play Ronnie you have to play the crowd, you have to accept it.
"I did my best but it just wasn't good enough."
