• Former two-division champion Cejudo, 36, was competing in his first fight in three years after retiring in 2020.
• Sterling won the belt off Petr Yan in 2021 and had defended it twice going into Saturday's bout.
Aljamain Sterling beat the returning Henry Cejudo by split decision to retain his bantamweight title at UFC 288 in New Jersey.
American Sterling, 33, utilised his longer range and was the busier striker throughout five competitive rounds.
Former two-division champion Cejudo, 36, was competing in his first fight in three years after retiring in 2020.
Following defeat, American Cejudo, a former Olympic champion in wrestling, hinted at a second retirement.
"If I'm not first, I'm last. I need to go back and talk to my wife and [UFC president] Dana White. We go back and think about it, maybe this is my last time in the octagon," said Cejudo.
The former flyweight and bantamweight champion left the sport three years ago, citing a lack of challenges which had depleted his motivation to keep fighting.
During his time away, his competitive edge rekindled after training with all-time greats Jon Jones, Demetrious Johnson and Cris Cyborg, and he set out to reclaim the bantamweight title he vacated from Aljamain Sterling.
Sterling won the belt off Petr Yan in 2021 and had defended it twice going into Saturday's bout.
Despite Sterling coming from neighbouring state New York, many of the fans inside the Prudential Center sided with Cejudo - who is from Phoenix, Arizona - as they chanted his name in the early stages.
The first grappling exchanges saw 2008 Olympic gold medallist Cejudo's wrestling background come to the fore, as he took Sterling down.
Sterling, as he would do throughout the five rounds, showed he would not be outmuscled by Cejudo, as he fought back to his feet and landed a takedown of his own towards the end of the round.
The taller fighter, Sterling utilised his length successfully as he peppered Cejudo with kicks throughout the fight, with the challenger struggling to get into positions to box effectively.
Going into the final round, the statistics showed Sterling had out-struck his opponent to the head, body and legs, and despite a strong finish from Cejudo, it wasn't enough to convince two of the judges.
Victory saw Sterling strengthen his claim as the UFC's greatest ever bantamweight as he earned a ninth successive win, which is the longest in the division's history, and a record third bantamweight title defence.
"Hats off to Henry Cejudo, I knew it was a close fight coming into it. Henry's a dog, he's a legend. It wasn't an easy task to run through him like I did everyone else," said Sterling.
Sterling then called out bantamweight rival Sean O'Malley, who joined the champion inside the octagon for a face off, sparking heated scenes.
Fellow UFC fighter Merab Dvalishvili, a friend and training partner of Sterling's, stole O'Malley's jacket as the pair argued, causing an angry reaction from O'Malley with security having to intervene.
Muhammad beats Burns in title eliminator
In the co-main event, American-Palestinian Belal Muhammad beat Brazil's Gilbert Burns by unanimous decision.
With victory, Muhammad, 34, extends his unbeaten streak to 10 and put himself in pole position to fight the winner of a proposed welterweight title fight between British champion Leon Edwards and Colby Covington.
Both fighters stepped up on short notice after the original co-main event between Charles Oliveira and Beneil Dariush was postponed.
Burns, 36, was fighting for the second time in a month after beating Jorge Masvidal at UFC 287 in Miami, while Muhammad last fought in October, earning an impressive win over Sean Brady.
Muhammad looked the stronger fighter from the first round as his takedown defence, constant switch of stances and series of left body kicks got the better of Burns.
For the majority of the fight, it appeared Burns was hampered by an injury to his left arm which severely affected his boxing and ability to take Muhammad down.
At the end of round three the Brazilian dejectedly walked to his corner and acknowledged his injury, and while his coaches urged him to fight through it, Muhammad's all-round game proved too strong to overcome.