China's Li Na overcame poor serving and an errant forehand in her first set against Slovakia's Dominika Cibulkova to win her second Grand Slam.
Victoria Azarenka has won a scrappy final against Li Na to successfully defend her Australian Open title and retain the world number one ranking.
Outplayed, out-thought and out-manoeuvred, Maria Sharapova's hopes of reaching another Grand Slam final have been undone by China's Li Na.
Two surprise results by Lu Yen-Hsun and Li Na, and a sexism row triggered by Serena Williams took attention away from Thursday's other tennis matches.
Francesca Schiavone of Italy will defend her French Open title on Saturday against China's Li Na in a tantalising clash of styles.
Kim Clijsters said she had finally earned her nickname "Aussie Kim" after beating Li Na 3-6, 6-3, 6-3 to capture her first Australian Open.
China's Li Na upset world number one and top seed Caroline Wozniacki 3-6 7-5 6-3 to reach the final of the Australian Open on Thursday.
Justine Henin capped her comeback by making the Australian Open final on Thursday where she will meet Serena Williams gunning for her fifth title.
Roger Federer and Serena Williams needed all their fighting spirit to stay in the Australian Open on Wednesday after Li Na stunned Venus Williams.
Serena Williams came back from the brink of defeat to make the Australian Open semifinals on Wednesday, but her sister Venus not so lucky.
Novak Djokovic claimed Serbia's first-ever Olympic tennis medal on Saturday while the giant-killing run of China's Li Na came shuddering to a halt.
China's Li Na produced a shock defeat of Svetlana Kuznetsova as the Olympic tennis tournament produced a catalogue of upsets on Monday.
World number one Justine Henin goes into the Australian Open as the overwhelming favourite after an inspired 2007, but there is no shortage of challengers. Among them is superstar defending champion Serena Williams, who stunned the tennis world by winning the title last year in her comeback event following an injury-plagued 2006.