Federer ended the world number one's 23-match winning streak on Tuesday by consigning him to a first indoor defeat in three years, but there was no repeat performance when it really mattered.
Djokovic produced yet another clinical display to triumph 6-3 6-4 and win the season-ending tournament for a fifth time, claiming his 11th title of a phenomenal year.
Six-time champion Federer, competing in a record 10th final in this event, was unable to claim a solitary break of serve as Djokovic demonstrated why he has become the dominant force in men's tennis.
Djokovic had a break point in the first game of the match, but Federer got himself out of trouble and was just a point away from leading 2-0 following a couple of stray forehands from the top seed, yet failed to take the upper hand.
A sublime backhand winner gave Djokovic another chance to break and Federer was unable to deny him a 2-1 lead, with the Serbian going on to wrap up the first set when his foe sent a backhand volley wide.
Federer had the backing of a vociferous crowd as he came up with a brilliant one-handed backhand winner and ended a thrilling rally in the sixth game with a superb overhead, but was unable to secure an elusive break.
Djokovic came up with two sensational forehand winners to earn another three break points, only for Federer to win five points in a row to make it 4-4, but a double fault on match point in his next service game ensured the defending champion retained his title once again.
STATISTICAL BREAKDOWN
Djokovic [1] bt Federer [3] 6-3 6-4
ACES
Djokovic - 5
Federer - 6
BREAK POINTS WON
Djokovic - 3/9
Federer - 0/2
FIRST SERVE PERCENTAGE
Djokovic - 66
Federer - 64
PERCENTAGE OF POINTS WON ON FIRST/SECOND SERVE
Djokovic - 62/84
Federer - 71/43
TOTAL POINTS
Djokovic - 62
Federer - 53
