The dominant American swept past her greatest rival 6-4, 6-4 on Rod Laver Arena for her seventh Melbourne Park crown to finally clinch the record for Open-era major titles, nearly 18 years after winning her first.

The 35-year-old, who equalled Graf's mark of 22 at Wimbledon last year, now stands just one behind the all-time 24 won by Margaret Court, who was in the president's box to witness Williams' feat.

Her astonishing achievement also means she again becomes the world's top-ranked player, ending the brief stay of Angelique Kerber who knocked Williams off the top after three-and-half years in September last year.

Fittingly, her sister and closest confidante Venus was on the other side of the net to share the moment, another chapter written in their long rivalry.

It was Venus -- still a teenager with beads in her hair -- who knocked Serena out in round two on her Grand Slam debut in Melbourne 19 years ago, and they have since played nine major finals together, living each other's highs and lows.

At 36 and seeded 13, Venus had turned back the clock to make her first Grand Slam title match since Wimbledon in 2009, but adding to her seven major successes was not to be.

Showing the single-mindedness that has propelled her to greatness, a focused Serena, seeded two, overcame a scratchy and nervous start in which all four opening games were breaks and when she smashed a racquet in frustration.

But she soon settled to get a decisive break to go 4-3 in front with an unstoppable backhand, and served out the set with an ace.

Serena was fired up and after the first two games of the second set went to serve, she worked three break points in the third only for her sister to negotiate her way out of trouble with some big forehand winners.

The tense battle went with serve to 3-3 before Serena cranked up the pressure to break with a scintillating crosscourt backhand and take a 4-3 lead.

With history beckoning, she wasn't about to throw it away and she served out the match, falling to the floor in celebration before a long embrace with Venus to share the biggest moment of her career.