Karlsson's total of 25-under-par 263 bettered the old mark which Colin Montgomerie set in 1989. Monty posted 264 that year to win the crown. Karlsson had also set a new 54-hole record with his 196 total.
'It is never easy, but my focus this week was fantastic. I was really, really happy with how I felt on the course,' admitted Karlsson. 'I just took it one shot at a time and that led to a good week.'
The 36-year-old Karlsson won for the second time this season and for the seventh time in his European Tour career. That makes him the winningest Swede in tour history and likely earns him a spot on the European Ryder Cup squad.
'I haven't really thought about the Ryder Cup so far, obviously I'm still trying to understand what this win was all about,' Karlsson said. 'But I know I definitely playing pretty good at the moment.'
Charl Schwartzel closed with a 5-under 67 Sunday. That moved him into a share of second place at 21-under-par 267, where he was joined by Lee Westwood (69). Schwartzel shared second place for the third time this year.
World No. 5 Retief Goosen also shot 67 in the final round. He was joined in fourth place at minus-20 by Graeme McDowell (65), Andres Romero (66) and Emanuele Canonica (67).
Karlsson drained a 15-foot birdie putt at No. 3 to get on the board Sunday. That was his fourth birdie on that hole this week. He then birdied the par-5 sixth for the fourth round in a row as he two-putted for birdie from the fringe.
The Swede came right back with a long birdie putt on the seventh at Gut Kaden Golf Club to move to minus-23. Karlsson parred his next three holes, but his lead dropped to two shots as Romero made a run at the lead.
Karlsson responded by sticking his approach inside 2 feet at the 11th and kicking that in for birdie. Two holes later, Karlsson drained a 15-footer for birdie to extend his lead back to five.
He got up and down for birdie on 15, then birdied 17 from 5 feet out to move six clear of the field at 27 under.
Karlsson, who won the Wales Open earlier this year, lost his drive off the tee at the last. He played his fourth to 13 feet, then two-putted for double bogey and the final margin of four shots. Karlsson had gone 49 straight holes since his last bogey on the fourth hole during his second round.
'The was definitely the best I've done mentally over four rounds,' said Karlsson. 'I just kept doing my own thing, playing my game and it was enough.'
For the week, Karlsson has played Nos. 2, 3, 6 and 17 at 16 under par with 14 birdies, an eagle and a par.
Schwartzel posted three birdies on the front nine to get to 19 under, but he faltered to a bogey on the par-4 ninth. Around the turn, the South African posted three more birdies to end at 21 under.
Westwood was even-par for his round through six holes with two birdies and a double bogey. He birdied the ninth and 10th, but gave those strokes back with bogeys at 12 and 14. Westwood birdied three of the last four holes to tie Schwartzel in second place.
Gary Orr took eighth at 19-under-par 269 after closing with a 68. Sergio Garcia was one stroke further back at minus-18 after a 68 of his own in the final round. Garcia was joined there by Soren Hansen, who shot 67 on Sunday.
Niclas Fasth, the 2005 champion, shot 68 Sunday to end in a tie for 11th at 16-under-par 272. He ended alongside Christian Nilsson (66) and European Ryder Cup captain Ian Woosnam (72).