Hamilton finished only ninth following an explosive turn-three incident, after which the British driver asked if Vettel had deliberately crashed into him.
The championship rivals both sustained damage in the collision as Hamilton's Mercedes limped back to the pit lane with a right-rear puncture while Vettel stopped for repairs to his Ferrari's broken front wing.
And although a determined Vettel fought back through the field to cross the line in fourth place, he fell well short of the victory he required to prevent Hamilton from winning the title with two rounds to spare.
Hamilton, 32, has now surpassed Sir Jackie Stewart by becoming the first British driver to win more than three championships.
He crossed the line with his head in his hands before holding a Union Jack aloft as he celebrated his remarkable achievement.
"It doesn't feel real," Hamilton said. "That was not the kind of race I wanted, but I never gave up and that is what is important - what is in my heart - and that I kept going right to the end.
"I had a good start and I don't really know what happened in turn three. I gave him plenty of room, and I tried as hard as I could to come back."
Hamilton had vowed to seal his fourth championship in style, rather than this way. After qualifying only third, he knew the 800-metre charge to the first corner - the longest on the calendar - represented his best chance of writing his name into the record books with his 10th victory of the year.
Pole-sitter Vettel, Verstappen and Hamilton charged three abreast at 220mph into the left-handed opening turn.
Verstappen then made his move around the outside of Vettel at the right-handed second corner before the pair banged wheels.
Vettel then clumsily tapped the back of Verstappen's Red Bull before Hamilton sensed his opportunity. He roared around the outside of Vettel at the ensuing turn, only for the Ferrari driver - now down to third - to make contact with Hamilton's right-rear rubber.
The German, whose hero Michael Schumacher famously took Jacques Villeneuve out of the concluding race in Jerez 20 years ago in a do-or-die attempt to win the championship, appeared at fault.
Hamilton led the inquisition as he asked over the team radio whether it was indeed an act of desperation from his title rival.
''Did he hit me deliberately?'' Hamilton asked.
"Not sure, Lewis,'' came the reply from his race engineer Pete Bonnington.
The stewards looked at the dramatic incident but took just seven minutes to make up their mind by pursuing no further action.
"It was a bizarre accident," Hamilton's Mercedes boss Toto Wolff told the BBC. "It wasn't looked at which is even more bizarre."
Mercedes' non-executive chairman Niki Lauda added: "I don't know why Sebastian drove so aggressively to destroy his race and Lewis's. Lewis was in front and Sebastian hit him with his front wing. I just don't understand it."
Vettel emerged from the pits 35 seconds adrift of leader Verstappen, with Hamilton one minute behind the Red Bull man.
The Ferrari driver was soon on a charge, and by half-distance he was into the points, albeit the best part of 60 seconds adrift of second-placed Bottas.
Hamilton's progress through the pack was rather swift, and he fought past Fernando Alonso in the closing stages to claim ninth.
Despite Vettel reducing the points deficit to 56, Hamilton heads to Brazil for the year's penultimate grand prix with an unassailable lead.
As such, Hamilton follows up his title triumphs in 2008, 2014 and 2015, to join Schumacher, Juan Manuel Fangio, Alain Prost and Vettel in a now five-strong group of drivers to have won motor racing's biggest prize on more than three occasions.
Speaking about how he clinched the title, Hamilton added: "It was a horrible way to do it to be honest, but what could I do?
As a driver you try and raise the bar and today was the most unusual."
He added on Sky Sports F1: "I'm really happy with this fourth.
I'm going to have to take some time to really think about it but I'm proud of the flag and everyone who represents it. I'll continue to rise it as high as I can."