In defeating the man that ended his US Open title defence earlier this season, the 23-year-old Spaniard claimed the ninth 1000-level title of his career.
Unlike their five-set quarter-final epic in New York two months ago, the clash in Paris lasted just under two hours.
"Coming here every year, not finding my best tennis but we never gave up," Alcaraz said after being handed the trophy for the first time by former Paris Masters winner Boris Becker.
"We had really painful losses here and we always said try again," he added with a smile
Ahead of the ATP Finals, which run November 15-22 in Turin, world number three Alcaraz now holds five tour-level titles this year - only the injured Jannik Sinner has more with six.
Coming into Paris on the back of winning the 500-level title in Vienna, Alcaraz has won his last nine matches.
In Italy, he will be seeking a first coronation at the season-ender.
After winning two French Opens and now the Paris Masters, Alcaraz is undefeated in title matches in the city.
But not for the first time in the French capital, Alcaraz won the title by saving match points en route - this time against Taylor Fritz in the quarter-finals in scenes reminiscent of his iconic Roland Garros final win against Italian Sinner last year.
For world number four Shelton, it was a first defeat in a Masters final after winning his two previous appearances in showpiece matches at that level - both coming in the last two editions of the Canadian Open.
'10 out of 10'
Serving at 1-2 in the first set, Alcaraz flirted with danger as he offered up four break points, but dug in to secure the hold when Shelton misfired at the end of a seven-minute long game.
Shelton then found himself two break points down in the seventh game but responded with a perfect drop volley and blistering passing shot to bring up deuce, before holding and keeping his nose in front.
Although both players threatened on the other's serve and drew repeated gasps from the crowd with some audacious shot-making, the opener nonetheless required a tie-break to separate them.
A Shelton error at 4-4 followed by a leaping backhand smash by Alcaraz brought up two set points.
The first came and went when Alcaraz thundered the ball into the top of the net cord and the expectant arena froze in time as it rose and fell in seeming slow motion, only to land on the Spaniard's side of the court.
Alcaraz was not to be denied a second time, however, as Shelton overcooked a forehand on the next point to cede the opener.
At 2-2 in the second set, Shelton let out a bellow of frustration after missing a groundstroke at 15-30 on Alcaraz's serve, but the American could smile at the end of the game as a double fault and missed forehand produced the first break of the match.
Alcaraz had said after booking his spot in the final that his reflexes would need to be "10 out of 10" when facing Shelton's serve and they were just that three games later as he levelled the set at four-all.
A deft exchange of angled drop shots ended by an Alcaraz winner down the line brought the Spaniard's finger to his ear and the crowd again to their feet as Shelton suddenly found himself serving to keep the final alive.
He did so at the first time of asking but when required to serve again to force a breaker, Shelton cracked as Alcaraz again pounced to seal the title with a flicked backhand winner.