Martha, with owner Shirley Zindler, beat 13 other contenders to be presented with a trophy and a $1,500 (£1,200) prize.
This year's event included a red carpet walk and a "fashion faux paw show" - complete with ugly sweaters - allowing the less aesthetically pleasing canines of the world the chance to strut their stuff.
Martha is former rescue dog who went almost blind from neglect, said Ms Zindler.
Martha's handler Shirley Zindler says the rescue dog underwent several surgeries to be able to see again.
Moe, a 16-year-old Brussels Griffon-pug mix who was the oldest in the contest, came in second.
According to the Associated Press, Martha was an outlier in the contest, which usually features much older and much smaller dogs.
He had lost his hearing and sight but his sense of smell is strong and he was enjoying all the smells at the Sonoma-Marin Fair, including funnel cakes and other fried goodies. Monkey, a 6-year-old Brussel Griffon, and Icky, an 8-year-old unknown breed, were both rescued from a hoarding situation.
If Martha is big, ugly, lazy, gassy and still a world champion, you can be anything you want to be.
These dogs - some with acne, others with tongues permanently sticking out - are used to getting called ugly.
"He's my sexy boy", Vicky Adler, of Davis, California, spoke of her 8-year-old Chinese Crested named Zoomer.
Chase, a 14-year-old Chinese Crested-Harke mix, came all the way from Neath, United Kingdom to take third place.
The judges took into consideration first impressions, unusual attributes, personality, and the crowd's reaction when deciding the winners.
"Never did I imagine that she would be ending up on articles and onstage and on TV", Burkard told The New York Times.
"We're proud to celebrate all dogs and pets by showing that no matter their imperfections, they are adoptable, lovable and a great addition to any family", said Erin Post, CEO of the Sonoma-Marin Fair.
Besides the main crown, the Spirit Award is presented to a dog and owner who have overcome obstacles or provide service to their community, organizers said.