Germany's Kerber, who lost the Monterrey final to Pavlyuchenkova in 2013, was denied her first tournament title of the year in a see-saw victory by the Russian in stifling heat.
"I'm really overwhelmed and don't think I realised that I just won my fourth Monterrey trophy," second seed Pavlyuchenkova told reporters. "It's very special and it's a special place in my heart.
"Playing against the number one player in the world is already very special because everyone wants to compete against the number one. You don't get so many chances to do it, so it was one opportunity for me today. Beating her feels amazing."
Pavlyuchenkova seized the early advantage in the match, taking the only break of the first set on her third set point.
Kerber won a long third game to break serve in the second set and rode that momentum to level the match.
Pavyluchenkova, who reached quarters at both the Australian Open and BNP Paribas Open this year, raced to a 5-0 lead in the final set and served out to claim her ninth career title in just under two hours.
The Russian was the clear aggressor, cracking 49 winners to 31 unforced errors while Kerber registered only 14 outright winners in the final.