The 22-year-old Nishikori won his second career ATP tour title and first in more than four years. Nishikori, a native of Shimane Prefecture in southern Japan, is the first Japanese player to win the tournament in its 41-year history.
Nishikori, ranked No. 17, thrilled the home crowd by defeating the sixth-seeded Raonic in front of a packed house.
He lost just two games on serve against Raonic, who lacked the spark he showed Saturday when he ousted top-seeded Andy Murray in the semifinals. Raonic was undone by unforced errors in the loss.
"To have won this tournament in Japan is a very happy occasion for me," Nishikori said. "I made an effort to approach today's match as the challenger."
Nishikori broke Raonic to go up 2-0 in the final set with a nice backhand down the line. His confidence growing, Nishikori began coming to the net more frequently.
After holding serve to lead 3-0, Nishikori rifled a two-handed backhand down the line to break for 4-0 and went on to close it out 6-0 with one more break.
"I wish I could have started off serving better," Raonic said. "He was reading my serve really well from the beginning and that usually doesn't happen. I didn't create the opportunities and go for it like the previous two days."
Nishikori broke Raonic in the second game of the opening set, only the second time in 44 games in the tournament that Raonic dropped a game on serve. But Raonic later broke back and eventually forced a tiebreaker.
Nishikori squandered two set points at 6-5.
Raonic went up 3-0 in the tiebreaker, but Nishikori won seven of the next nine points to clinch the set. Raonic struggled with his backhand returns and sent one long to end the tiebreaker.
Raonic found his rhythm in the second set and began to serve better, hitting eight aces, just as Nishikori appeared to tire.
Nishikori's previous victory on the ATP tour came in Delray Beach, Fla., in February 2008 when he was just 18.
Raonic had won two tournaments this year, in Chennai, India, and San Jose, Calif.