Alvarez (42-0-1) retained his WBC super welterweight belt while claiming the vacant Ring Magazine title - and the WBA belt that Trout won from Rigoberto in February 2011 in their hometown of Guadalajara.
"This is for my brother," Alvarez said, with Rigoberto looking on. "He beat my brother, and that's my blood."
The scorecards gave 22-year-old Alvarez the win - 115-112, 116-111 and 118-109 - against the 27-year-old southpaw from Las Cruces in New Mexico.
Trout had never even been decked in his career but Alvarez stunned him with an onslaught in front of 40,000 fans - most of them Mexican - to put him on the canvas in the seventh round with a right hand.
"I'll take the loss like a man," Trout said. "The better man won tonight. He was better than me. I have no excuses.
"He caught me with a good shot. There is nothing else I can say."
The pair fought out a ferocious battle over the 12 rounds, with Trout just surviving a second barrage in the seventh as well as earlier killer blows in the third and fourth.
"Austin Trout is difficult fighter, but I was smart," Alvarez said. "Little by little I figured out how to fight him. I was able to connect with my right and my jab. My jab was key."
Alvarez remains undefeated with a 42-0-1 (30 KOs) record.
Victor Terrazas won the vacant WBC super-bantamweight title in a split decision at Arena Ciudad de Mexico against fellow Mexican Christian Mijares.
Terrazas (37-2-1, 21 KOs) won an incredibly close fight on the cards 114-113 115-112 113-114 against Mijares (47-7-2, 22 KOs).
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