The Cardinals overcame a slow start, in which they twice trailed by 12 points in the first half, to outscore Michigan 45-38 in the second and capture their third national title after previous wins in 1980 and 1986.
Luke Hancock came off the bench and scored a career-best 22 points, including five three-pointers, while Peyton Siva added 18 points and Chane Behanan 15 for Louisville.
"We went into a war today against a great Michigan team," said Hancock, who was named the outstanding player of the tournament. "We needed to rally and we have done it a couple of games."
Trey Burke, the national player of the year, scored 24 points in a losing effort for the Wolverines while Spike Albrecht contributed 17 after coming off the bench, all in the first half.
"We fought for 40 minutes, there was never a time when we gave up," said Burke. "Louisville was just a really solid team at the end of the game."
Michigan made a flying start and built a double-digit lead before the Cardinals took control, matching the second biggest comeback in an NCAA final in the same massive building where the 'Dream Team' won Olympic gold in 1996.
Inspired by their team-mate Kevin Ware, who broke his leg earlier in the tournament in a horrific fall, Louisville's players burst into celebration when the clock ran out and confetti rained down on the Georgia Dome court.
Louisville went into the championships as the number one seeds and stretched their winning streak to 16 games with Monday's victory under the guidance of Rick Pitino, who became the first coach to win NCAA titles at different universities after steering Kentucky to the 1996 title.
"For a young basketball team, to play that well is absolutely fantastic," Pitino said.
"These guys ... they said if you win the national championship, 'Coach, you are getting a tattoo'. I said, 'Hell, yeah, I am getting a tattoo.'"
Michigan were making their first appearance in the final since 1993 when they were beaten by North Carolina after a bizarre ending to the game.
The Wolverines were trailing by two points with just 11 seconds to go when Michigan's Chris Webber called a time-out even though his team did not have any left, resulting in a technical foul that effectively ended his team's hopes of winning.
Michigan coach John Beilen thought his team did not perform the way they could have on Monday but paid tribute to the "terrific" Cardinals.
"We feel bad about it, we could have done some things better, every one of us," said Beilen.
"At the same time, Louisville is a terrific basketball team. I have not seen that quickness anywhere, it's incredible."
- Sports & Recreation