Ivanovic, in her first WTA Finals appearance since 2008, made a nervous start, but soon warmed to the challenge in front of her.
At 4-1 down, the Serb won three straight games to turn the match on its head. She even had a golden opportunity to break for a 5-4 lead, failing to commit to a routine volley. This slip-up proved costly, Williams wrapping up the set moments later.
Williams has been a class apart at this tournament in recent years, winning it on her past three visits, in 2009, 2012 and 2013. However, Ivanovic continued to push her in the second, which was every bit as closely contested.
After exchanging early breaks, both players found a groove on serve. Once again, it Williams that held her nerve at the end, a brilliant down-the-line backhand winner helping her to the decisive break in the final game of the match.
"I'm really excited with how I played tonight," Williams said after the match. "To see all my fans over there was really exciting - thank you so much!
"I've been working hard and am glad to be here. Today I was really fighting all the way. Ana played so well, I was just trying to fight as hard as i could. I was even losing my voice from shouting 'come on' so much!"
While there were plenty of positives for her vanquished opponent to take, Ivanovic could not conceal her disappointment during the post-match press conference.
"I'm definitely very disappointed that both sets I made few easy errors in the last service game," Ivanovic said. "Especially in the first set, you know. I had a break point in 4-all, which I didn't take and kind of got down a little bit on myself.
"Then I rushed a little bit in the next service game, so that was a little bit disappointing. I felt I created lots of chances, especially off the ground."