Despite several crashes, pace cars and a red flag, the Mercedes AMG driver kept his cool took a controlled victory around the streets of the Principality.
Rosberg took the victory thirty years after father Keke's victory, making them the first father and son to win on the harbourside track.
Mark Webber survived the pressure of having Lewis Hamilton glued to his gearbox for well over half the race but Daniel Ricciardo's race ended in the escape road at the exit of the tunnel, the victim of a Romain Grosjean mistake.
Practice and Qualifying
Nico Rosberg monopolised the top of the timesheets, with Red Bull, Lotus and Ferrari lurking in the top five. Romain Grosjean showed well, despite crashing on both Thursday and Saturday, barely making it into qualifying.
Felipe Massa didn't have as much luck after his crash, unable to turn a wheel and consigned to the back of the grid.
Come qualifying, which started wet and finished dry, Rosberg again planted his Mercedes in the top slot, with teammate Hamilton alongside.
The Red Bulls of Vettel and Webber followed closely, with Raikkonen fifth. Toro Rosso's Daniel Ricciardo could only manage twelfth, two places behind his teammate.
Mercedes' race day began under a cloud of controversy as news broke the team had conducted a Pirelli tyre test at Barcelona, the rest of paddock apparently unaware.
In contrast to Saturday, Sunday was bright and sunny with the inevitable parade of celebrities on the grid before F1's most famous race.
Rosberg got a good start and Hamilton did to, but he also had to cover Vettel. Webber got away well and kept fourth.
Vettel kept harrassing Hamilton, trying to force his way past at Mirabeau, locking up in the process.
Perez and Button argued over seventh place, Perez cutting the Nouvelle Chicane and at the Swimming Pool to take the place. Perez was eventually told to give back the place, and he duly did some laps later.
Rosberg settled into the lead and set a controlling pace that suited the team. Vettel later described it as being "like two buses going for a slow cruise."
Red Bull asked Webber to keep a two second gap to Vettel, ostensibly to save tyres. This was made all the more awkward for the Australian as he had a rampant Raikkonen behind him.
Vettel and Webber picked up the pace on lap 24 as the field closed in on the first flurry of pit stops. Rosberg and Hamilton were asked to speed up.
Webber pitted first on lap 26, fitting soft compounds and dropping back in behind Hulkenberg in eleventh. Raikkonen pitted next time around, as did Button.
Alonso pitted on lap 29, but was unable to jump the Lotus of Raikkonen, although he was closer than he had been before the Finn's stop.
Felipe Massa had his second accident of the weekend at Ste Devote on lap 30, pinballing off the armco and into the tyres.
The Brazilian emerged from the high speed accident under his own steam, but had a neck brace fitted by the trackside doctor and was transferred to hospital.
The much-expected safety car neutralised the field, just as Vettel took his first stop. It worked out for Vettel and Webber, the Red Bull pair vaulting Hamilton.
The Safety Car stayed out for eight laps as the Ferrari was cleared and the Caterham of van der Garde waved through to unlap itself.
The restart finally came on lap 39 and Rosberg leapt away from the Red Bulls. Alonso and Raikkonen diced at the Nouvelle Chicane while Hamilton had a few cracks at Webber. He nearly got by at Rascasse but Webber cut him out of the deal at Antony Noghes.
Alonso and Button had the lightest of touches at the hairpin. Slightly baulked, Button lost a place, this time fair and square to Perez who threw his McLaren down the Briton's inside at the bottom of the hill.
Perez tried the same trick on lap 44, jamming his car down the inside of Alonso, who had to evade by cutting the Chicane.
The red flag was thrown on lap 46 after Max Chilton drove into Pastor Maldonado. The Williams took to the air and speared into the plastic safety barriers at Tabac. The barrier came unstuck from the Armco and almost completely blocked the circuit.
Chilton made it back to the pits and was awarded a drive through penalty for causing an incident.
Maldonado walked away unhurt, but the barriers required some attention during the twenty-five minute stoppage.
During that time, Alonso was told he would have to cede his position to Perez. The Ferrari driver shook the Mexican's hand while on the grid during the red flag period to settle things down.
Before the rolling restart, the drivers were able to change tyres, with Rosberg, Vettel and Perez switching back to super soft tyres, while Raikkonen and Hulkenberg went to softs.
The restart was uneventful with the battle for the top four resuming much the same as it had before Massa's crash.
Rosberg took a 1.2 second lead within two laps, Vettel seemingly unable to attack the German.
Webber and Hamilton, however were having a huge battle, with Webber having to carefully place his car to fend off the hungry Mercedes driver.
Once again, Webber was in an awkward position, having to avoid wiping out his teammate who was holding back under instructions from his engineer.
Perez had an optimistic go at passing Raikkonen on lap 53, the Mexican wearing out the welcome mat at the Nouvelle Chicane and forcing Raikkonen across the kerbs.
Adrian Sutil was having a terrific afternoon, passing a number of cars, including Jenson Button. The German had crashed his Force India earlier in the weekend and was looking to make amends.
His fearless attacks on Alonso were great to watch and he finally grabbed the place from Alonso at the Loews hairpin. It later transpired the Spaniard was suffering from debris in his front wing.
Ste Devote claimed another victim on lap 61, with Jules Bianchi's miserable weekend finally drawing to a close after a slower version of Massa's crash.
Romain Grosjean's clean race run ended on lap 63 with him rear-ending Daniel Ricciardo at the exit of the tunnel. The Frenchman appeared to be asleep at the wheel, piling into the back to the Toro Rosso and tearing off the rear wing.
Grosjean limped back to the pits, Ricciardo's race was well and truly ended. Grosjean retired soon after with a broken floor and was later given a ten place penalty for Canada.
"I could see that Grosjean had got a good run out of the tunnel and that he was close, so I defended my line and the next thing I knew he was over the back of me," Ricciardo said.
The Safety Car rejoined the track as the debris was cleared.
Once again, Rosberg got a jump on the restart, Vettel allowing him into a 1.5 second lead. Hamilton was less happy, complaining of tyres falling away.
Lotus radioed Raikkonen to tell him the engine was losing water and needed to cool the car, putting his twenty-third consecutive points finish in doubt.
Perez put it almost beyond doubt when he tagged Raikkonen, once again at the Nouvelle Chicane.
The McLaren lost a number of front wing parts as he ended up squeezed against the barrier. Raikkonen slowed with a left-rear puncture. Button grabbed a position from Alonso as Raikkonen peeled off into the pits.
Perez ran into trouble at Rascasse and tried to get into the pitlane but his teammate was in the way, slipping by behind Adrian Sutil. The Mexican was left stranded on the outside of Antony Noghes, his race over.
Raikkonen had an epic final few laps, coming back from 16th to finish tenth and take the point.
Vettel never mounted the expected challenge, but did set the fastest lap, much to his team's displeasure. Webber survived Hamilton's best efforts to take third and Adrian Sutil took fifth for Force India.
"We knew we were a little bit against it starting on the second row, but I got an absolutely incredible start and it's sod's law that it's the shortest run into the first corner here," Webber said after the race.
"We had to go pretty long and all the drivers were nursing the tyres – it was nice to get Lewis on the stops."
Formula 1 returns in two weeks for the Canadian Grand Prix in Montreal.
Monaco GP Results
- Nico Rosberg - Mercedes 2h17m52.056s
- Sebastian Vettel - Red Bull-Renault + 3.888s
- Mark Webber - Red Bull-Renault + 6.314s
- Lewis Hamilton - Mercedes + 13.894s
- Adrian Sutil - Force India-Mercedes + 21.477s
- Jenson Button - McLaren-Mercedes + 23.103s
- Fernando Alonso - Ferrari + 26.734s
- Jean-Eric Vergne - Toro Rosso-Ferrari + 27.223s
- Paul Di Resta - Force India-Mercedes + 27.608s
- Kimi Raikkonen - Lotus-Renault + 36.582s
- Nico Hulkenberg - Sauber-Ferrari + 42.572s
- Valtteri Bottas - Williams-Renault + 42.691s
- Esteban Gutierrez - Sauber-Ferrari + 43.212s
- Max Chilton - Marussia-Cosworth + 49.885s
- Giedo van der Garde - Caterham-Renault + 1m02.590s
- Sergio Perez - McLaren-Mercedes 72 laps
- Romain Grosjean - Lotus-Renault 63 laps
- Daniel Ricciardo - Toro Rosso-Ferrari 61 laps
- Jules Bianchi - Marussia-Cosworth 58 laps
- Pastor Maldonado - Williams-Renault 44 laps
- Felipe Massa - Ferrari 28 laps
- Charles Pic - Caterham-Renault 7 laps