Azarenka earned the first tennis medal ever for Belarus by beating No. 14-seeded Maria Kirilenko of Russia 6-3, 6-4.
Azarenka won only three games off Williams but started well against Kirilenko and broke serve five times. By the third game of the second set, Kirilenko was heaving her racket in frustration.
When Kirilenko pushed a backhand into the net on match point, a triumphant Azarenka sank to her knees. A supporter tossed her a Belarusian flag, which she happily draped over her shoulders as she walked off the court to cheers.
Later Saturday, Williams won her first Olympic singles gold medal by beating Maria Sharapova 6-0, 6-1.
Sharapova's loss allowed Azarenka to retain the No. 1 ranking.
Information from The Associated Press was used in this report.