Navarrete, of Guadalajara, beat out the last of 83 standing at the 59th annual pageant held at Las Vegas on Monday night and watched by millions of people in almost 200 countries.
She was followed by Miss Jamaica Yendi Philipps on the second place while Miss Australia Jenista Campbell was the second runner-up.
Miss Ukraine Anna Poslavska got fourth place while Miss Philippines Venus Raj rounded up the top five.
Miss India Ushoshi Sengupta failed to even make it to the top 15.
Donning a flowing red gown, Navarrete was the first contestant to answer an interview question onstage and she highlighted how important it is to teach children about family values.
Asked by Olympic gold-medal figure skater Evan Lysacek how she felt about unsupervised Internet use, Navarrete said the Internet is important but parents need to be careful and watch over their kids.
“I do believe that Internet is an indispensable, necessary tool for the present time. We must be sure to teach them the values that we learned as a family,” she said.
Navarrete replaces Miss Universe Stefania Fernandez of Venezuela who won the title in 2009.
As part of her winning she will get a luxury New York apartment with living expenses, a one-year scholarship to the New York Film Academy, jewellery, clothes, shoes and an undisclosed sum of money.
“I want to give my parents a big hug. There was a lot of effort and a lot of sacrifice,” she said at a press conference after winning the title.
Navarrete has been a model since she was just 15-years-old and is only the second Mexican beauty after Lupita Jones (1991) to win the title of Miss Universe.