Martinez hoisted the mirrorball trophy with his professional partner, Karina Smirnoff.
Host Tom Bergeron called the Iraq war veteran an inspiration to the audience.
The all-male finale was set up halfway through the final show when talk show host Ricki Lake was voted off, finishing third. Judges' scores combined with viewer votes determined the winner.
Judges didn't provide much extra guidance during the final competition, a samba that the dancers had to perform with little preparation time. The three judges gave both teams perfect 30 scores for their final dances.
"For one of you, that was your victory dance, but I think both of you are winners," judge Carrie Ann Inaba said. "That was a great way to end this season."
Martinez came into Tuesday's episode tied with Lake for second place. He reprised his jive routine from week two, and though he made a few mistakes, judge Len Goodman said, "You've got such a sparkling personality, you just light up this room."
With his positive attitude and apparently natural dance skill, Martinez scored high with both judges and fans all season. A motivational speaker who embodies his message, the 28-year-old thanked his partner and his fans when he was announced as the winner.
Martinez was serving in Iraq in 2003 when the U.S. Army vehicle he was driving hit a land mine. He suffered severe burns over 40 percent of his body and endured dozens of operations during his nearly three-year recovery. That was when he began sharing his experiences and optimistic outlook with other burn patients. He answered an open casting call in 2008 and won a role on the long-running and now-retired ABC soap opera "All My Children."
The "Dancing" victory brings Smirnoff her first mirrorball in 10 seasons. Though she said Monday of Martinez, "He is my mirrorball trophy," she also acknowledged that they really wanted to win, saying it would be "a perfect ending to a perfect story."
Tuesday's two-hour finale also included music from Lady Antebellum and appearances by this season's former contestants: TV personalities Nancy Grace and Carson Kressley, reality star Kristin Cavallari, actors David Arquette and Elisabetta Canalis, singer Chynna Phillips, activist Chaz Bono, basketball player Metta World Peace and soccer star Hope Solo.
Kressley performed a cheeky routine to Madonna's "Vogue" that included him taking a spin with one male dancer and being dipped by another. The openly gay contestant, paired with pro dancer Ana Trebunskaya, was a fan favorite this season and has returned several times since he was eliminated from the competition to consult on fashion and bring his sense of silliness to the show.
Phillips took advantage of a second opportunity to try a "Mission Impossible" routine that she had muffed the first time around, resulting in her elimination.
After being voted off partway through Tuesday's show, Lake said she loved every minute of her experience.
"I've done something I really didn't think I could do," said the talk show host, who lost a significant amount of weight during the competition. "For someone who's a middle aged mom, I hope I made my children proud, my fiancé and my family."
Martinez, Kardashian and Lake were whisked away to New York after the show Tuesday to make an appearance on Wednesday's "Good Morning America."