Federer totalled 21 aces and never faced a break point, while Philippoussis had 14 aces 13 below his tournament average and a costly double fault in the pivotal first tiebreaker.
When Philippoussis hit a return into the net on match point, Federer sank to his knees, looked to the sky and smiled. He shook hands with the Australian, then took a seat and began to sob, covering his eyes with his hands.
"I was always joking around when I was a boy, 'I'm going to win this','' a laughing Federer told the crowd during the trophy ceremony. "I never thought it possible to win a Grand Slam.' At the end of the ceremony, as Federer thanked his Swiss supporters, he again began to cry, then lifted the trophy over his head.
Philippoussis, who hit 46 aces in a fourth-round win over Andre Agassi, cracked serves at up to 138 mph against Federer. But the young Swiss man often got them back, and he had the easier time holding serve, going to deuce only once.
The first tiebreaker turned when Philippoussis hit a double fault long to fall behind 6-4. Two points later he had a crack at a second serve from Federer and took a big swing, but it sailed eight feet wide to give Federer the set.
A dispirited Philippoussis then lost his serve twice in a row and fell behind 4-0 in the second set.
The Australian held serve the rest of the way. But Federer took a 3-1 lead in the final tiebreaker with a lucky
mis-hit forehand return that landed in the corner for a winner. Three subsequent errors by Philippoussis helped Federer close out the victory.
"I didn't have one break point today, and he definitely returned a lot better than I did,' Philippoussis said. "He took advantage of his chances, and it was too good."
Philippoussis was hoping to become just the third unseeded men's champion since Wimbledon began seeding players in 1927. His runner-up finish is the latest chapter in a comeback from a knee injury that required three operations and nearly ended his career.
"There are a lot of positive things to take with me from the last two weeks,' he said. "I'll definitely be back.'
Federer, the No. 4-seed, lost only one set in the tournament, the first man to do so since Richard Krajicek in 1996. He overcame a back injury that required treatment from a trainer during his fourth-round win.
"I thought I had to throw in the white towel, but somehow I came through and my back got better and my game got better,' Federer said. "It's just incredible. I don't know how I did it.' With his victory, seven men have won the past seven Grand Slam titles. That contrasts with the domination of the women's tour by Serena Williams, who beat sister Venus in Saturday's final and has won five of the past six major events.
Federer improved to 12-0 this year on grass and has long excelled on the surface. He was the Wimbledon boys champion in 1998, and in 2001, at age 19, he ended Pete Sampras' 31-match Wimbledon winning streak.
Yesterday, with both players hitting big serves and following them to the net, the rallies were fast and furious. One of the few long exchanges came on the fifth point of the first tiebreaker, when both players stayed back and traded 15 shots the last a forehand winner by Federer.
After 47 minutes, Federer earned the first break point and converted it when Philippoussis put a tough volley in the net. Another volley in the net gave Federer another break, and he held from there to close out the second set.
To reach the final, Philippoussis twice rallied from a set down, and once from two sets down. But against Federer there would be no comeback.
The 1-hour, 56-minute match might have been even shorter, but chair umpire Gerry Armstrong overruled a lineswoman's call with Philippoussis facing break point in the final set.
Philippoussis hit a second serve that was called out as Federer shanked his return. Armstrong overruled the call and awarded the point to Philippoussis, rather than ordering it replayed.
Federer frowned but did not argue. Philippoussis won the next two points for a 2-1 lead, and held serve from there. But he managed only one service winner and no aces in the final tiebreaker.
Federer is the first former junior champion to win the men's title since Stefan Edberg, the winner in 1988 and 1990.