The Ducati star was untouchable from lap 10 of 27 onwards as he accelerated to his ninth victory of the season by 6.7secs over team-mate
Loris Capirossi - handing Ducati the 2007 teams' and manufacturers' world championships in the process.
"Being up on the podium was just unbelievable, I've never felt anything like it," said Stoner, whose home fans packed the start-finish straight to cheer their hero on the podium.
"I've been working very hard for a lot of years trying to win here. This whole season has been magical for us, we came here with a lot less pressure after winning the title in Japan, so I could really enjoy this race. It's definitely my best victory so far. I have to thank the Australian fans, it's good to see so many of them here and I hope they've had a lot of fun, I really appreciate it.
"I made one of my best starts, I had the first corner to myself so I could concentrate on getting the tyres warmed up and ready to go," recalled Casey. "Nicky [Hayden] was really pushing in the beginning, he was on my rear wheel for a while but I managed to get away. I was really hoping, more than ever, that Loris would get on the podium here, so it's been another great weekend for the team and for Ducati."
"My start wasn't really good, so in the early laps I had to fight a lot with Marco [Melandri] and in my opinion he was little bit too aggressive," said Capirossi. "I had to push really hard to overtake him and then I said 'please take it easy'. After that I tried to keep my pace and I finished second, so I'm really, really happy and a big thanks to my team who worked so hard all weekend.
"This is another great moment, especially after my win at Motegi. I am trying to end my five years with Ducati in the best way possible," said the Future Suzuki rider. "Ducati has won everything this year - the riders', constructors' and teams' championships, which proves that everything's working 100 per cent at the factory."