Kerr ended at 14-under-par 199 and beat Sorenstam by two shots for her third win this season and ninth of her career. She led Sorenstam by a shot overnight after firing a career-best 61 on Saturday.
Kerr also now owns a share of the tournament record, which Sorenstam set in 2002 when she won the first of her three titles here in four years.
Sunday, Kerr had a bogey on the front nine and four birdies on the back.
Sorenstam played a bogey-free round, but made only two birdies to close with a 69 and end at 12-under 201. It wasn't enough to beat her playing partner.
'[S]he's played in a lot of tournaments that I've won but not in the same group, so this is probably the first or second time going head to head that I've beaten her,' Kerr said.
'This is one of the only times I've gotten her.'
Beating Sorenstam on Sunday isn't as tough as beating Tiger Woods on Sunday, but it's as close as it gets in women's golf.
'She's obviously playing her very best,' Sorenstam said of Kerr. 'I was expecting her to play well.
The final rounds at Cedar Ridge played out as a reversal of last week, when Kerr was runner-up to Sorenstam at the State Farm Classic. Sorenstam equaled the course record last Sunday with her lowest round in more than three years, a 10-under 62, to close it out.
'I guess you can look at it that way,' Kerr said. 'I played great today, and she shot very, very low rounds at The Rail last week. This golf course is extremely tough.'
Sorenstam rolled in a 9-foot birdie putt at the first hole to tie Kerr at 10 under. Later, Kerr three-putted from 20 feet at the eighth for her bogey, falling a shot back around the turn.
But Kerr turned it on beginning with a 12-foot birdie putt at the 11th. She made another birdie at the 12th after escaping from a fairway bunker, then drained putts of 38 and 18 feet for birdies at 15 and 17.
Sorenstam made her only other birdie at the 10th, on a 6-foot putt.
'Now when I look back, I wish I would have made a few more birdies, but I didn't make any mistakes,' she said. 'When I walk away from here, I think I've got to give myself credit for that. I didn't really give away any shots.
'Maybe I could have made a few more, but it's all about mistakes, too, and I didn't make many, and I'm proud of that.'
Leading money winner Lorena Ochoa finished third at 10-under 203. She had a 6-under 65 on Sunday.
'I was too many shots behind the leaders, it was tough to make it happen,' said Ochoa. 'But I gave it a good try. I played very aggressive and I had a really good start.'
Diana D'Alessio fired a 5-under 66 Sunday and finished alone in fourth place at 9-under 204. Jenna Daniels (67) and Sun Young Yoo (68) shared fifth place at 208.