A surprise semi-finalist at last year's Australian Open after entering the tournament as a qualifier, Karatsev went on to be one of the big improvers of 2021.
And he's taken that form into 2022, handing Murray a sound 6-3 6-3 beating on Ken Rosewall Arena.
The top seed in Sydney, who will jump to a career-high No.15 when the rankings are updated, Karatsev bested Murray with three breaks across the two sets to take his third title.
With blistering returns reminiscent of Andre Agassi in his pomp, Karatsev stamped his intentions immediately by breaking the serve of three-time grand slam champion Murray in the first game.
He repeated the dose in the ninth game to take the set.
With Karatsev then breaking Murray to take a 2-0 lead in the second, the Brit looked up against it until the fifth game when he had five opportunities to bring the match back on serve.
But Karatsev held firm, maintaining his advantage to eventually seal the trophy on his third match point.
Still, it was a solid tournament for Murray, who is in his twilight years on tour after major hip surgery.
Currently ranked No.135 in the world, he is projected to rise to No.113 off the back of his Sydney performance.
Murray will take on Nikoloz Basilashvili in the Australian Open first round, having beaten the Georgian world No.23 in a tight three-setter in Sydney earlier this week.
Karatsev will be highly-fancied to win his opening round Melbourne Park match against Spain's Jaume Munar.