Pavlich, who polled 144 votes in 20 games, became the 10th player in VFL/AFL history to win his club's best and fairest award for a sixth time, adding to his triumphs of 2002 and 2005-08.
Fitzroy's Kevin Murray and South Melbourne's Bob Skilton each won nine club champion awards during their brilliant careers, while Hawthorn champion Leigh Matthews won eight.
Western Bulldogs Scott West (seven) and Gary Dempsey (six), Essendon's Dick Reynolds and Bill Hutchison (seven), and Richmond's Jack Dyer and Collingwood's Nathan Buckley (six) are the others to achieve the feat.
Pavlich, who enhanced his standing as Fremantle's most significant figure in the club's 17-year history, edged brilliant youngster Fyfe by three votes to be a surprise winner.
In accepting the award, Pavlich said he believed Fyfe, the pre-count favourite alongside key defender Luke McPharlin, was "stiff" to miss out.
The 20-year-old Fyfe was a revelation in his second season, playing 21 games and leading Fremantle for contested possessions and disposals. His form was recognised with selection in the 40-man All Australian squad.
"He is only in his second year, and I said to him up on stage, 'You've got the next five, mate'," Pavlich said.
At the end of every game this season, Fremantle coaching staff gave every player votes on a 5-4-3-2-1 basis, with top votes awarded for what is regarded as an "elite performance".
Half-back Greg Broughton (118 votes) and McPharlin (108) rounded out the top four.
Fremantle's injury crisis forced Pavlich to shoulder a heavy midfield load in 2011, and the skipper averaged 24 disposals a game, leading the club in clearances and kicks.
It was a season of individual milestones for the 29-year-old, who broke the club games record and played his 250th game. He also broke Peter Bell’s record of 107 games as Fremantle captain.
However, Pavlich said the individual achievements "don't mean a thing" to him at the moment as he chases an elusive premiership in the final years of his career.
"We have an enduring trait to acquire things, and as a player I want to acquire success," he said.
"I know the rest of my teammates need and want to acquire success.
"To be elite, to be great in the AFL, we all need to step up, including myself. We all need to become hardened, very good AFL players and staff.
"I'm getting older, I know that.
"If the success comes while I'm here, great. If it doesn't, I just hope it comes at some point."
Pavlich echoed the bold mood of optimism at Saturday night's count, with president Steve Harris, chief executive Steve Rosich and new coach Ross Lyon all issuing strong messages.
Harris, who thanked former coach Mark Harvey for his "significant contribution" to the club, said Fremantle entered 2012 with an "unashamed focus of playing finals and being a serious finals contender".
Lyon received a warm reception from the crowd of more than 1000 guests, laying down a challenge to his players to "decide what we can be".
"You tell me the standards you're prepared to commit to and then my job is to be relentless in holding them to account to what they commit to," Lyon said.
"If we've got the right group they'll commit to the right actions."
In other awards, mature-age WAFL recruit Tendai Mzungu won the Beacon Award as the club's best first-year player, while Matt de Boer won the Best Clubman award for the second straight year.
Retiring stalwarts Byron Schammer and Roger Hayden were also acknowledged, with key defender Antoni Grover also receiving a special presentation after reaching the 200-game milestone during the 2011 season.
Top 10
Matthew Pavlich 144
Nat Fyfe 141
Greg Broughton 118
Luke McPharlin 108
David Mundy 102
Aaron Sandilands 98
Stephen Hill 94
Antoni Grover 88
Hayden Ballantyne 83
Chris Mayne 72
