Kerr shot a 3-under 69 in the final round to finish with a new tournament record of 24-under-par 264. That score bested Kate Golden's old mark of 267 from 2001.
'I can't say enough about how steady she (Kim) played,' said Kerr, who missed the LPGA Tour's record for lowest score in relation to par for 72 holes by three strokes. 'I guess that's why you build up a lead.'
Kim, who matched the course record on Thursday with a 10-under 62, fired a 6-under 66 to miss out on LPGA Tour victory No. 1 by a single stroke.
Kim did have her chances as she took a one-shot lead after a 7-foot eagle putt at the par-5 15th. Kerr made birdie on the same hole to get to 23 under par.
The players endured a 20-minute wait on the par-3 16th tee and the stoppage found its first victim. Kim pulled her tee ball long and left, leaving with her a difficult downhill chip running toward the water. Kerr landed 35 feet short of the flag.
Kim's chip ran by the hole and headed for the drink. The ball stopped in the heavy rough and she pitched her third 12 feet past the hole. Kerr ran her birdie putt 3 feet past the hole, then watched Kim sink the bogey putt. Kerr made par and the two were tied on the 17th tee.
Both players found the fairway off the tee at 17 and both had inside 95 yards with their second shots. Kim went first and applied the pressure, as her approach came down 10 feet right of the hole. Kerr answered with a wedge shot that spun across the left edge and stopped 5 feet from the hole. Kim's birdie putt missed right, while Kerr's fell in the center to give her a one-shot lead with one to play.
At 18, Kerr's drive landed in the right rough behind a tree. Kim split the fairway, then hit her second from 154 yards to 5 feet. Kerr had no choice but to hit a low shot under a tree and hope it ran on to the putting surface. Her ball skipped into a bunker, but she blasted out to 4 feet.
Kim missed her birdie putt right and Kerr drained the birdie putt to earn her third victory of the season and her fourth since joining the LPGA Tour.
'Each win is obviously its own win,' said Kerr. 'I felt like I was playing well and was under par, yet still I had lost the lead. I felt like I had the lead and came from behind to win at the same time. This one is definitely unique.'
Kerr became the third player to win at least three times on tour in 2004, joining Annika Sorenstam and U.S. Women's Open champion Meg Mallon. The first- place check of $180,000 moved her to fourth on the LPGA Tour's money list.
Kim. only 20 years of age, is inching ever closer to that first victory on tour.
'Words can't explain how I feel,' said Kim, wiping away tears. 'I'm very proud of myself. Lord knows I hope it's not the best finish of my career. I have so many years ahead of me.'
Kerr's second 63 in as many days on Saturday switched a four-shot deficit into a four-shot lead heading into Sunday's final round.
But it was Kim who came out making birdies on Sunday. She ran home a birdie try from the fringe at the third, and she and Kerr both made birdies at No. 4.
Kim sank a 25-foot birdie putt at the sixth to cut the margin to two and Kerr helped out when she missed a 12-footer for par at No. 7. Kerr reclaimed the lost stroke with a 10-foot birdie putt at eight, but Kim rolled in a 15-footer for birdie at the 10th to get within one.
Kim knotted things up at the 14th when she hit her approach to 9 feet. She made the birdie putt and Kerr made par after driving into the right rough and coming up 25 feet short.
Then it was Kim's eagle at 14 that put her in front. Unfortunately for Kim, Kerr made the putts down the stretch.
'I think my experience made me less nervous than her,' said Kerr.
Mi Hyun Kim shot a 5-under 67 on Sunday to take third place at 18-under-par 270. Pat Hurst also posted a 67 in the final round, but finished three behind Mi Hyun Kim at minus-15.
Lorena Ochoa, who won last week's Wachovia LPGA Classic, shot a 2-under 70 on Sunday and tied for fifth place with Kim Saiki (65), Candy Hannemann (70), Suzann Pettersen (71) and Nancy Harvey (71). That group came in at 14-under- par 274.
Dorothy Delasin came in 10th place alone at minus-13.
Candie Kung, who won this event last year, tied for 17th at 11-under-par 277.