Skipper Manish Pandey (60* off 45 balls, 4x4, 6x2) led from the front with a sublime half-century before the bowlers fired in unison to help the side retain the crown.
Batting first, Karnataka posted 180/5 in the allotted 20 overs with useful contributions from Pandey, Rohan Kadam (35), Devdutt Padikkal (32) and K.L. Rahul (22).
Karnataka bowlers then produced a fine display of death over bowling to restrict Tamil Nadu to 179/6 in their 20 overs.
All-rounder Vijay Shankar top-scored for Tamil Nadu with 44 off 27 balls while Baba Aparajith made 40 off 25 deliveries.
Needing 13 runs from the last over, Ashwin struck two consecutive boundaries off Krsihnappa Gowtham to reduce the margin, but Shankar's run out two balls later cost Tamil Nadu dearly.
Tamil Nadu needed three runs off the last ball but Murugan Ashwin could only manage one as Karnataka captured the title for the second time in a row.
In October, Karnataka had defeated Tamil Nadu to lift the 50-over Vijay Hazare Trophy for the fourth time.