'Don't know how I've done so well here,' said Morgan. 'Maybe it's the water.'
Champions Tour rookie Peter Jacobsen carded a final-round 67 to finish three shots off the pace at 11-under-par 205.
Morgan carried a three-shot lead into the final round at Valencia Country Club and landed his tee shot inside 10 feet for a birdie at the par-3 third.
He reached the green in two at the par-5 ninth and two-putted for a birdie before sinking a short birdie putt at the par-4 10th.
'You get a little defensive because you know they have to come get you,' said Morgan. 'I played solidly on the front.'
At the par-4 11th, Morgan dropped his approach within six feet of the cup and converted the birdie putt to move to 15-under par and open a five-shot lead over his closest competitors.
Morgan had a chance to increase his advantage at the following hole but missed a four-foot birdie putt at the 12th.
The 57-year-old faltered coming home with a bogey at the 17th but was able to walk away with his 23rd career victory on the Champions Tour.
'My goal has been to get to 30 combined victories,' said Morgan, who also owns seven PGA Tour titles. 'That's a milestone I've been shooting for recently. Now that I've got it, I might loosen up and win a few more.'
Nelson posted a 68 that featured an eagle at the par-5 18th to take second place at 12-under-par 204.
Jacobsen, who made his debut on the Champions Tour this week, had a torrid front nine with five birdies and a bogey to make the turn at 10 under.
The 50-year-old hit his tee shot to three feet for a birdie at the par-3 14th and reached 12 under with a birdie at the 15th.
Jacobsen stumbled with a bogey at the very next hole, however, and parred his way in to finish alone in third place.
'Felt great,' said Jacobsen. 'I loved the atmosphere out there today.'
Joe Inman fired an 8-under 64 to match the course record. Inman, who is also a three-time champion at this event, was joined by Graham Marsh in a tie for fourth at 10-under-par 206.
Last year's champion Tom Purtzer posted a 68 to finish alone in sixth place at 9-under-par 207.
Hale Irwin, Craig Stadler, Mark James, Allen Doyle, Bruce Fleisher and Gary McCord tied for seventh place at 8-under-par 208.