Gaborik beat Lundqvist twice in the first period, finished with three goals and an assist, and earned MVP honors in leading Team Chara to a 12-9 win over Team Alfredsson on Sunday.
Tim Thomas made 18 saves in the final period, and extended his record by winning his fourth All-Star game.
Despite the loss, Alfredsson rewarded his hometown fans by leading his team with two goals and an assist. The Senators captain also hinted afterward that he is considering coming back for one more season.
In an interview broadcast on the arena's scoreboard, Alfredsson was asked about his future.
With a smile on his face, and fans cheering his name, Alfredsson said: "Fifty percent yes, and my wife's going to have to decide the other 50."
Henrik Sedin had a goal and two assists for Team Alfredsson.
Gaborik became the 16th player to score at least three goals — one short of matching the record — in the All-Star game, and first since Rick Nash had three in 2008.
The outcome was decided in the final period, in which Team Chara outscored Team Alfredsson 6-3.
Chara gave his club a 10-8 lead when Gaborik fed him a perfect pass into the middle for a snap shot past Elliott.
Team Chara got off to a fast start, building a 3-0 lead on Gaborik's second goal 9:51 in. The club was so dominant that it was leading 2-0 before Alfredsson's team got off its first shot.
Gaborik certainly enjoyed getting the best of Lundqvist. After scoring his first goal on a give-and-go with Datsyuk, Gaborik circled the net dropped to one knee and pointed his stick at Lundqvist while pumping his fist.
Lundqvist jokingly lamented about being beaten three times on eight shots, including twice by his Rangers teammate.
"There's been a lot of trash talk, but it feels like it's game over already," said Lundqvist, who was wearing a microphone during the opening period.
Lundqvist was Alfredsson's assistant captain, and had a hand in the team's drafting philosophy on Thursday.
Team Alfredsson rallied to tie the game at 3 before the first period was over. But they didn't get their first — and only lead — until Alfredsson scored twice during a 1:31 span to put his team up 6-5 with just under four minutes left in the second.
His first goal came on a great individual effort in which Alfredsson, dragging the puck behind him, split defensemen Kimmo Timonen and Ryan Suter, and flipped a shot that sneaked inside the right post to beat goalie Carey Price.
Alfredsson's second goal came on a wonderful passing play courtesy of Daniel and Henrik Sedin, whom Alfredsson was looking forward to play with when he drafted the twins. Henrik Sedin drove up the left wing, fed a pass through the crease to his twin brother, who then redirected to the high slot, where Alfredsson slapped it home.
Price allowed three goals on 14 shots, and had lamented the All-Star game's lack of defense during the first intermission.
"I feel like being a lamb getting led to slaughter," Price said. "I'm must be holding on for the ride today and hope I don't get lit up too bad."
Alfredsson nearly had a third goal nine minutes into third period, when he one-timed a shot off the left post
The game was missing the NHL's most high-profile stars in Sidney Crosby and Alex Ovechkin. Crosby has been limited to playing just eight games this season as a result of a concussion, and has also been diagnosed with a neck injury, making it unclear when or if he will play at all this season.
Ovechkin backed out last week after the NHL suspended him three games for an illegal hit.
The game featured 17 first-time All-Stars, 10 playing on Team Alfredsson. Team Chara's roster had the edge over Team Alfredsson in combined games played (10,227-8,425, not including goalies), career goals (2,850-2,286) and career points (7,394-6,164).
On the penalty shot, Stamkos — who leads the NHL with 32 goals — attempted the same spin-around move he used to beat Price in the skills competition on Saturday night. Howard didn't bite on Sunday, holding his ground and hugging the post to stop Stamkos' attempt.
It was the second penalty shot taken in an All-Star game. The other was last year in at Raleigh, N.C., when Colorado's Matt Duchene was stopped by Lundqvist.