Judges, including rock star Steven Tyler from Aerosmith, picked the winner from a total of 86 contestants at the show, watched by millions of viewers around the world.
Last year's winner Olivia Culpo placed a diamond crown on the head of Isler, who wore a silver rhine-stone studded evening dress.
Culpo earlier appeared on stage wearing a white cutaway swimsuit studded with diamonds, rubies and emeralds that the organisers said was worth $1 million.
"That swimsuit travels with an armed security guard 24/7," commented co-host Thomas Roberts, an American television presenter.
Isler is now set to pose in the same swimsuit on Sunday.
Roberts, who co-hosted the final with ex-Spice Girl Melanie Brown, dedicated the show to the people suffering from the typhoon in the Philippines.
"We send our very best, our thoughts. We dedicate tonight's show to you" he said.
All 86 contestants initially appeared on stage in red and black cocktail dresses. They then changed into red and black bikinis.
The judges then whittled down the contestants to a final 16, who faced off in a bikini round, carrying white fur stoles.
Then the women were narrowed down to a final 10, who strutted on the stage in elaborate sequinned evening gowns.
Host country Russia was eliminated immediately, prompting boos in the audience.