Other stand-out performances came from Australian world champion Sally Pearson over the women's 100m hurdles and Kenyan Milcah Chemos, who ran the fourth fastest time ever in the 3000m steeplechase.
After a sun-kissed opening two hours of competition, the temperatures dropped for the Bolt v Powell duel, but the Jamaicans did not let the capacity crowd at the Bislett Stadium down.
Teeth gritted and long legs pumping, Bolt screamed through the finish line in 9.79 seconds, Powell notching up his 77th sub-10sec 100m in 9.85sec.
The 25-year-old reigning double Olympic sprint champion left it late in the race to reel in Powell, the former world record holder who was left wondering what he has to do to improve on his 11-1 losing record against Bolt.
"I really enjoyed it!" beamed Bolt. "My execution was alright. I'm going home now to top things up.
"I'll look to go fast and look forward to the trials."
Powell added: "It was an awesome race. I was there until 85 metres then my legs tired.
"Usain is a lot stronger at the end so that was it. But it's good to go to the trials with such a fast time. It brings me confidence."
In the 100m hurdles, Pearson equalled her own world leading time of 12.49sec, overcoming a false start by British heptathlete Jessica Ennis to power home 0.07sec ahead of American Kristi Castlin, with US-born Briton Tiffany Porter taking third (12.70).
"I travelled 29 hours to get here, I'm a bit jet-lagged but I'm doing well," the 25-year-old Pearson said.
"I like being chased, it keeps me hungry. I'm not feeling the pressure because I'm feeling confident."
Ethiopian Kenenisa Bekele, the reigning Olympic 5,000 and 10,000m champion who is battling to rediscover his world-beating form after injury, sat back in the field of the 5,000m until the bell rang for the last lap.
But he had left himself far too much to do, finishing fifth, with compatriot Dejen Gebremeskel taking the honours in 12:58.92, with 10 Ethiopians in the first 12.
World champion Dai Greene was also upset in the 400m hurdles, Puerto Rico's Javier Culson winning in a world lead of 47.92sec. Greene, a week after pulling out of Rome with a stomach virus, came in fourth in 48.98sec.
"That was not a good race for me," said Greene. "I pushed hard in the first 250 metres and had nothing left."
Botswana's world 400m champion Amantle Montsho made no mistake in her race, coming home in 49.68sec to send out a warning to world leader Sanya Richards-Ross of the United States.
Milkah Chemos smashed more than 6sec off her own season leading time in the 3,000m steeplechase, timing a fourth fastest time ever of 9:07.14, a new African record.
"When I improve my technique over the barriers I definitely think I can go close to the world record," the 26-year-old said.
"But first up is the Kenyan trials."
Chemos' teammate Asbel Kiprop, the Olympic 1,500m champion, clinched the Dream Mile in 3:49.22 ahead of compatriot Caleb Ndiku and world indoor bronze medallist Mekonnen Gebremedhin of Ethiopia.
There was also no drama for in-form Frenchman Renaud Lavillenie, who won the pole vault with a best of 5.82m, 20cm higher than German rival Malte Mohr.
Home favourite Andreas Thorkildsen finished in a disappointing third place in the javelin, behind winner Vitezalav Veselyof of the Czech Republic and runner-up Fatih Avan from Turkey.