Emmanuel Adebayor slotted home in the second minute to put Spurs ahead at White Hart Lane and substitute Jermain Defoe wrapped up the win in the second half.
Arsenal's win at West Brom meant Harry Redknapp's team finished fourth in the Premier League but they will be denied a place in Europe's top club competition next season if Chelsea beat Bayern Munich in the Champions League final on Saturday.
For most of the afternoon a party atmoshpere took hold of White Hart Lane as Spurs looked to finish above Arsenal for the first time since 1995.
Although Spurs have beaten their fifth-place finish from last season, many will feel they should have pipped their neighbours to third after going on an unbeaten 11-match run towards the end of 2011.
At one point in January, Spurs were on the verge of going 13 points clear of Arsenal but in the end, a terrible run of one win in nine during the second half of the season means Tottenham may now end up playing in the Europa League next season.
Today victory never seemed in doubt for the Londoners.
Any hopes Martin Jol had of seeing Fulham take an early advantage were quashed after 96 seconds thanks to Adebayor's opener.
The former Arsenal man exchanged passes with Rafael van der Vaart and surged in to the box before slotting past Mark Schwarzer to spark wild celebrations.
Spurs continued to dominate but the atmosphere became a little subdued as news of Yossi Benayoun's opening strike for Arsenal filtered through.
A double salvo from West Brom sparked huge celebrations among the home crowd and Spurs almost moved further ahead themselves when Aaron Lennon's cross just missed Van der Vaart's head.
Luka Modric skipped past two players in to the box and his deflected effort fell in to Gareth Bale's path but Schwarzer smothered the Welshman's shot.
Arsenal's second equaliser sent nerves jangling and Fulham started to get in to the game more.
Brad Friedel gathered Stephen Kelly's cross as Pavel Pogrebnyak lurked at the back post but Spurs hit on the counter through Lennon, who found Van der Vaart via Adebayor, but the Dutchman volleyed barely an inch wide.
Eight minutes before the break Friedel saved well from John Arne Riise and Mousa Dembele in quick succession as the Cottagers ended the first half on top.
Kyle Walker collapsed holding his right foot in the 45th minute but elected to stay on.
Schwarzer saved a powerful shot from Bale moments later and the 22-year-old skied the rebound.
Walker emerged at the start of the second half but could only manage four more minutes before coming off for Ryan Nelsen.
Lennon beat his marker down the right and crossed for Sandro but the Brazilian headed straight at Schwarzer from eight yards.
Again the atmosphere went flat the news of Laurent Koscielny's goal for Arsenal.
The news - which Redknapp greeted by smashing his right fist in to the palm of his left hand - meant Spurs dropped to fourth in the table.
The 65-year-old was angered even more seconds later as the Spurs defence backed off, allowing Dembele to hit a powerful strike that beat Friedel but struck a post.
Redknapp could breathe easy again in the 63rd minute when Lennon's shot deflected in to Defoe's path off John Arne Riise and the England striker stabbed past Schwarzer from 10 yards.
Young right-back Adam Smith came on to make his debut 14 minutes from the end after Younes Kaboul hobbled off with an injury.
Gallas flicked Pogrebnyak's cross wide with five minutes to go, but other than that there was little action in the final quarter as the home crowd waited anxiously for news of an equaliser at the Hawthorns.
Friedel saved well from Damien Duff at the near post with four minutes left and the former Liverpool man pulled off a stunning save to deny Dembele soon after.
The game turned in to something of a procession and, much to Spurs' frustration, West Brom could not find a third goal against Arsenal.