Ivan Perisic and Shinji Kagawa, plucked from the Japanese second division two years ago, scored in each half as Dortmund wrapped up the title with two games to spare and completed their 26th league game without defeat.
Jurgen Klopp's side, who on Saturday included six players aged 23 or under, left more glamorous rivals Bayern Munich standing as they opened up an unassailable eight-point lead over the Bavarians with two games to play.
It was the eighth time Dortmund have been German champions, five of them in the last 20 years.
Dortmund's players celebrated by pouring huge glasses of beer over each other and coach Klopp as well as a startled Sky television commentary team who were broadcasting from the touchline.
"I haven't got words to describe what this team has achieved," said a beer-soaked Klopp, a coach known for his exuberant celebrations.
"It's just amazing. If ever there's a team that deserves to be champions, then it's us."
Dortmund came close to financial collapse seven years ago, and CEO Hans-Joachim Watzke is credited with guiding the 1997 Champions League winners into the most exciting sports brand in Germany in the past two seasons.
"It's unbelievable, when you remember where we have come from," he said.
Second-placed Bayern, who kicked off earlier, kept the race going for as long as they could when Franck Ribery scored in the last minute to give them a 2-1 win at Werder Bremen after Naldo had scored at both ends.
At the other end of the table, Kaiserslautern were relegated after two seasons in the top flight despite beating fellow strugglers Hertha Berlin 2-1 away to end a 21-match winless run.
The result plunged second-bottom Hertha into further trouble while Cologne, who are 16th and in the relegation play-off place, also dropped points at home in a 1-1 draw with VfB Stuttgart.
Hamburg SV, the only ever-present team since the Bundesliga was founded in 1963, eased their relegation worries with a 1-1 draw at Nuremburg.
Dortmund have 75 points from 32 games while Bayern, who guaranteed their place in the Champions League next season, have 67.
HIGH-TEMPO GAME
Although Gladbach enjoyed plenty of early possession, Kagawa hit the post and Robert Lewandowski, Dortmund's revelation this season and top scorer with 20 goals, fired a low shot narrowly wide as the hosts played their usual high-tempo game.
Perisic put Dortmund ahead in the 23rd minute when he got in front of the defence to head in Marcel Schmelzer's inswinging free-kick at the near post.
Dortmund survived a scare when Schmelzer cleared a Marco Reus effort off the line before wrapping up the title with a sweeping move down the left in the 59th minute.
Schmelzer sent Lewandowski free with a 50-metre ball out of defence and the Pole slipped his pass inside for Kagawa, who rounded goalkeeper Marc Andre ter
