After Edwards finally moved ahead, Stenhouse remained in second to give owner Jack Roush a 1-2 finish at Michigan International Speedway.
"This is coming home for me," said Roush, who has ties to Michigan dating to when he began working for Ford during the 1960s. "The fact that we've been able to have the success we've had in our backyard is really fun."
Edwards passed Stenhouse with less than 10 laps remaining Saturday to earn his fourth NASCAR Nationwide victory of the year. He had finished second in three straight Nationwide races since winning at Dover in May, but he was able to slip underneath Stenhouse and then cut in front of him before holding on to win by 1.669 seconds in the No. 60 Ford.
It was Edwards' 33rd career Nationwide victory.
"The laps kept ticking down, and I was driving harder and harder and I was not catching him," Edwards said. "His car wasn't as balanced as mine, and we were able to get by him. With 15 to go, I didn't think we were going to be able to get him."
It was Roush Fenway's record fifth series win at Michigan. After his victory, Edwards did his usual back flip, then went running into the stands to celebrate. He finished second in a Nationwide race at MIS in August and won one in 2008. He also has two Sprint Cup wins at this venue and will race in that series Sunday.
Mark Martin, seeking his 50th Nationwide win, was the leader coming out of the third and final caution on the 100th of 125 laps. Edwards and Kyle Busch quickly passed him, but Stenhouse moved to the lead not long after that.
Stenhouse led laps 104-116, but Edwards remained patient and denied Stenhouse what would have been his second win of the year.
"It was more work than I thought it was going to be," Edwards said. "I really had to drive hard. He is really getting good at this. He is going to be very tough."
Edwards, the Sprint Cup points leader, isn't eligible to earn Nationwide points. Stenhouse now leads the series standings. Elliott Sadler, eighth Saturday, is second. Reed Sorenson, the points leader entering the race, finished 11th following an early pass-through penalty for a commitment-line violation.
"I guess that is a good thing for us for sure for the championship, but it doesn't do anything for us not winning," Stenhouse said. "We are right there where we need to be, we just have to cap it off. We have to get a little bit better. I think Carl is a little better at practice, getting his car where it needs to be."
Busch, trying to match Martin's mark of 49 victories, had to settle for outlasting pole-sitter Paul Menard in a hard-fought race for third.
"We certainly won a lot of races in three years so maybe I shouldn't be in this position so fast, but yet it is a little frustrating that we're not able to get another win to tie and then another win to break," Busch said. "We've been close -- seems like every week we're a solid third, fourth, fifth-place car."
Although Menard had won the pole earlier in the day, he led for only one lap. Edwards led for 62 laps, and Stenhouse led for 38.
Menard was the beneficiary of the final caution, which began on the 95th lap. Martin arrived for a pit stop moments before the yellow flag and was able to move to the front when the leaders went for pit stops during the caution, but he fell back and finished seventh.
Brad Keselowski, who edged Edwards to win in Michigan last year, led for 11 laps, the most of anyone besides Edwards and Stenhouse. Keselowski, however, fell back after a pass-through penalty for an uncontrolled tire. He finished ninth.
"That's racing," Keselowski said. "Stuff happens. It's just part of the deal."