This is his second career title after victory in the Open de Nice in May in front of the watching world No.1 Novak Djokovic, who watched from the stands.
"Today was very special day. We were watched by world's No. 1 Novak Djokovic," Thiem said. "Usually he is the one who entertains us with great tennis and today we turned it around."
Thiem added that "this tournament is really special for me. I played many times here as a junior and dreamed that one day I will be able to play here in full stadium at night."
Both players held serve until the seventh game of the first set, when a series of astonishing drop shots from Thiem eventually led to him breaking Sousa. He then won seven of the next eight games with Sousa powerless to prevent his counterpart.
Thiem made only 11 unforced errors, compared to 26 by Sousa. Thiem hit 27 winners, Sousa 16. The Austrian's only low point came as he was serving for the match at 5-0. Three unforced errors saw him lose his serve but by that point he had already established a comfortable lead and eventually closed out the match.
Sousa conceded that "I am very disappointed, but Dominik played very well today ... he deserved to win."
It was their third career meeting, and Thiem now leads head-to-head series by 3-0.
Djokovic, who is in Croatia on a vacation after winning the title in Wimbledon, said Umag "holds a special place in my heart." He last played the tournament in 2006.
"I came in the name of all distant memories ... now that I'm here as a spectator in a shirt, I'm starting to get nostalgic," Djokovic said. "I'm drawn by the tennis, the racket is calling to me. Before I finish my career I'll definitely come back and play another tournament in Umag."