Dhawan's career-best 137 propelled India to a comfortable 307 for seven before the bowlers performed brilliantly to bundle out the Proteas for 177 in 40.2 overs in what turned out to be a rather lopsided contest at the packed Melbourne Cricket Ground.
This was India's maiden World Cup win against South Africa after having lost the clashes in 1992, 1999 and 2011.
With two wins from as many matches, India now have a very good chance of qualifying for the quarterfinals as group leaders.
Mohit Sharma (2/31 in 7 overs), Ravichandran Ashwin (3/41 in 10 overs) and Mohammed Shami (2/30 in 8 overs) kept the opposition batsmen under tight leash for better part of the innings.
The bowling unit fired in unison as South Africa never recovered once skipper AB de Villiers (30) fell short of his crease with Mohit's accurate throw on top of the stumps sending the destructive player back in the pavilion.
De Villiers and Du Plessis were going strong at one stage adding 68 runs for the third wicket as South Africa reached 108 for two before the skipper got run-out.
With Sachin Tendulkar cheering them from the stands, it was an electric atmosphere at the MCG as Dhoni's men cantered home in style. The Indian dressing room erupted in joy and the players hugged each other after last man stading Imran Tahir was trapped LBW by Ravindra Jadeja.
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