Sorenstam shot an even-par 72 in the final round to finish the tournament at 4-under-par 284, one stroke clear of the 22-year-old Gulbis. Carin Koch, Gwladys Nocera and Patricia Meunier Lebouc tied for third place at even-par 288.
Gulbis held a one-shot lead over her Swedish host after 16, having birdied three straight holes from the 14th at Barseback Golf & Country Club. But Sorenstam birdied No. 17 to pull even with her American friend heading into the last.
With a chance to earn her first professional title -- or at the very least force a playoff -- Gulbis lined up for a 26-foot birdie try at the 18th, but missed.
Ever the opportunist, the 34-year-old Sorenstam then clinched the victory with 29-foot birdie putt.
'I had a great time at this party. I hope everybody else did,' said Sorenstam, who collected her 75th career title and seventh of the season. 'I think we had it all today. We had tough conditions, we had some drama coming down 18, some birdies, and to win your own tournament -- it doesn't get much better than that.'
Sorenstam will have the upperhand when she attempts to defend her title next year. The 2006 Scandinavian TPC will be played at her home course, Bro-Balsta Golfklubb in Sweden.
'That's totally exciting news,' said Sorenstam. 'I got it this morning and I'm happy about that...I hope I can get some more players to come next year because I think it's a pretty neat story.'
Suzann Pettersen finished alone in sixth place at 1-over-par 289 after shooting a 4-over 76 Sunday. Helen Alfredsson and Maria Hjorth tied for seventh place two strokes further back.