[3] The 71-lap race was won by local hero Felipe Massa, driving a Ferrari, with Alonso taking second in his Renault and Jenson Button third in a Honda.
Michael Schumacher, in what was expected to be his last race, finished fourth, having started tenth and suffered a puncture which dropped him to 19th.
His seat at Ferrari was taken by Kimi Räikkönen, whilst Alonso moved to McLaren to partner rookie Lewis Hamilton.
At the start Felipe Massa retained his lead going into the first bend, ahead of Kimi Räikkönen and Jarno Trulli.
Michael Schumacher had a decent start from his 10th position on the grid and was on the inside of the two BMW Saubers going into the first corner, but had to back off to avoid a collision.
His apparently much quicker Ferrari allowed him to pass both BMWs three corners later as they were slowed by Robert Kubica overtaking teammate Nick Heidfeld on the back straight.
Rosberg in turn had another high-speed crash on the uphill main straight: he lost grip and spun heavily into the wall, due to the damage sustained in the earlier contact with his teammate.
As the safety car picked up the field at the end of lap 2, Massa led Räikkönen, Trulli and Alonso with Fisichella and Michael Schumacher moving up to 5th and 6th respectively.
Michael Schumacher was also soon to attack Fisichella's Renault, forcing the Italian to protect the inside line in turns 4 and 5.
This meant that the order on lap 11 was: 1st Massa, 2nd Räikkönen, 3rd Alonso, 4th Fisichella, 5th Barrichello, 6th Button, 7th Kubica, 8th de la Rosa, 9th Heidfeld, 10th Scott Speed, 11th Vitantonio Liuzzi, 12th David Coulthard, 13th Takuma Sato, 14th Christijan Albers, 15th Sakon Yamamoto, 16th Robert Doornbos, 17th Tiago Monteiro and 18th and last Michael Schumacher's Ferrari.
Fisichella's stop was slightly slower than Barrichello's, which nearly resulted in a collision as the two exited the pitlane - the Renault driver only just maintaining his position.
His teammate followed suit on lap 27 falling behind the two Toro Rosso in the process just as Button was able to slipstream Räikkönen and outbrake him into turn one.
The Renault seemed able to match the Ferrari's impressive straight-line speed and Schumacher was unable to overtake as easily as he had done with other cars.
A thrilling battle ensued as Fisichella defended valiantly, but on lap 62 he braked too late into Turn 1 and his Renault took to the grass, allowing Schumacher to gain in position.
With four laps to go, Schumacher was ready to attack again, but Räikkönen defended brilliantly against superior machinery by taking the inside line for the first turn.
Räikkönen tried to fend off the charging Ferrari and again took to the inside, but this time Schumacher was so much quicker he managed to pull alongside, finding just enough space between the McLaren and the pit wall.
Schumacher continued to chase down Alonso and Button, setting a new fastest lap (1:12.1) on the penultimate lap, but he was unable to catch them in time and Alonso made himself and Renault champions by finishing second behind the elated Felipe Massa, who became the first Brazilian winner in São Paulo since the late Ayrton Senna in 1993.
[7] It was also the last race for a V10-engined car to date as Scuderia Toro Rosso eventually switched to Ferrari 056 2.4-litre V8 engines from 2007 season.