Dixon started at the pole and ended up 3.4 seconds ahead of Power at the 14-turn Twin Ring Motegi course. Dixon, driving for Target Chip Ganassi Racing, finished in 1 hour, 56 minutes, 41 seconds.
It was his second victory of the year -- he also took the race Honda Indy 200 in Ohio -- and 27th in his career
Power, with Team Penske, was second, about 1 second ahead of Andretti Autosport's Marco Andretti.
Dario Franchitti, a Target teammate of Dixon's entered Sunday's race in the championship lead on Turn 1 of Lap 26 he hit the car driven by Ryan Briscoe and was assessed a penalty that pushed him to the back of the field. He wound up eighth.
Power leads the championship standings with 542 points. Franchitti is second at 531. Dixon moved into third with 483.
There are two races remaining on the 2011 IndyCar schedule. The next stop for the tour is Oct. 2 for the Kentucky Indy 300 in Sparta, Ky. The season wraps up Oct. 16 at the IndyCar World Championships at Las Vegas.