The 31-year-old Pacquiao won on all three judges' scorecards to extend his winning streak to 13.
The southpaw used his hand speed and ring savvy to prevail in front of a crowd of over 50,000, despite giving up a 17-pound (7.71 kg) weight advantage.
Pacquiao has shown little sign of losing speed and power as he moves up in weight to fight bigger and stronger opponents, but he failed to score the knockout on Saturday.
Even so, the bout didn't turn into the same kind of dull affair as Pacquiao's fight against Joshua Clottey at the same venue in March.
Unlike Clottey, Margarito came to fight. He paid the price as he suffered a nasty gash under the right eye and had a huge welt that almost closed his left eye as well.
Manny Pacquiao Beats Antonio Margarito
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