The 36-year-old, who earned the biggest purse in boxing history at $41 million, managed to win the showdown between the two undefeated fighters and wrest Alvarez's World Boxing Council and World Boxing Association super welterweight belts.
"It is about skills," Mayweather said. "I came out tonight and showed my skills.
"I just took my time and took the opportunities when I got them. I can't say this is my best performance."
Mayweather fought a brilliant tactical fight against the younger and stronger Alvarez in front of the crowd of 16,746 at the MGM Grand Hotel's Grand Garden Arena.
He used his jab and superior hand speed to keep Alvarez at bay, but Mayweather still only managed to win on two of the three judge's scorecards.
Judge CJ Ross surprisingly scored it a draw, 114-114, while Craig Metcalfe had it 117-111 and Dave Moretti scored it 116-112 in favour of Mayweather.
"I'm not in control of what the judges do," Mayweather scoffed. "I am in shock (by) whoever had it even."
This was just the second fight for Mayweather since he was released from prison after serving a sentence for assaulting the mother of his children.
Mayweather gave away 13 years in age and 15 pounds to the younger and stronger Alvarez, who moved down in weight for the showdown.
The seventh was one of Mayweather's best rounds as he landed several combination punches early before backing Alvarez up into a corner and hitting him with a right uppercut that snapped the Mexican's head back.
Mayweather came into the fight at 150 pounds, just a couple pounds lighter than he was at Friday's weigh in.
Alvarez was first to step into the ring, followed by Mayweather, who walked slowly into the sold-out arena flanked by rap artist Lil Wayne and Canadian teen heartthrob Justin Bieber.
The Mexican fighter entered the fight at 165, 13 pounds heavier than he was at Friday's weigh in.
Alvarez, who turned pro at age of 15 in 2005, suffered the first loss of his career.
"Obviously I didn't want to leave with a loss," said Alvarez, who dropped to 42-1-1. "It happens and it hurts."
Alvarez said he thought Mayweather fought an Olympic style fight by impressing the judges with the volume of punches he landed not the quality.
"He is very fast and accurate. His punches weren't that strong but he is making points and very fast," Alvarez said.
Mayweather connected on three times as many jabs (139-44) as Alvarez and landed almost double the number of total punches, 232-117.
This was the second in Mayweather's six-bout, 30-month contract with Showtime that could pay him more than $200 million.
Saturday's fight marked the first time since 2007 that he has fought twice in a calendar year and Mayweather said he plans to repeat that schedule in 2014 by fighting in May and September.
Some questioned why Mayweather would choose to fight Alvarez instead of accepting even more money to fight Filipino superstar Manny Pacquiao, who Mayweather has been accused of dodging.
Mayweather said that Pacquiao is no longer on his radar.
"I want to take my promotion to another level. I am not thinking about Manny Pacquiao," Mayweather said.
On the undercard, Danny Garcia kept his World Boxing Council and World Boxing Association super lightweight titles with a unanimous decision over challenger Lucas Matthysses.
Garcia knocked Matthysses down in the 11th round and then the two went toe-to-toe in the final seconds of the 12-round showdown with both looking to end the bout with a knockout.
"We had a game plan and we stuck to it," Garcia said. "I stood focused and disciplined.
"I faced adversity before and he hadn't. I knew I would get this win."
Garcia improved to 27-0 but Argentina's Matthysses made him work for it as he sent Garcia's mouthpiece flying with a hard right hand in the 11th.
Carlos Molina also won the International Boxing Federation's junior middleweight title with a split-decision victory over Ishe Smith.