The 32-year-old world number one now has 17 Grand Slam titles, just three behind great rival Roger Federer.
Nadal endured a nervy conclusion to the final, however, when he needed treatment in the fourth game of the third set for a finger injury before sealing victory on a fifth match point when Thiem fired a backhand long.
“It’s really just incredible. I played a great match against a great player,” said Nadal.
“I had tough moment in the third set with cramps in my hand. I was very scared but that’s sport –it was very humid.
“To win 11 times here — it’s fantastic and not something I ever dreamed of.
“It is always my dream to win this trophy, you all know how important the tournament is to me.
“So I hope to see you all again next year.”
Nadal joins Australia’s Margaret Court as the only player to win 11 titles at the same major.
Victory also took Nadal’s record at Roland Garros to 86 wins and just two losses.
For Thiem, playing in his first Slam final, it was a tremendous letdown for a player who is the only man to have beaten the Spaniard on clay in the last two years.
“Rafa, this is one of the most outstanding things an athlete has achieved in any sport,” said the seventh seed.
“It’s amazing, bravo.
“I saw you win this in 2005 when I was just 11 years old. But I never dreamed of getting the chance to play the final here.”
With a celebrity audience – including actors Hugh Grant and Tim Roth as well as French stars Marion Cotillard and Jean Dujardin – watching, Nadal flew out of the blocks.
He reeled off the first six points for a 2-0 lead before Thiem settled and repaired the damage for 2-2.
The Austrian speared a 222 km/h ace just for good measure in the fourth game to save a break point.
He saved another two in the 11-minute sixth game, a performance cheered by the crowd who briefly became more animated when glum-looking French football icon Zinedine Zidane was spotted in the stadium.
Despite matching Nadal forehand for forehand, Thiem was undone in the 10th game when three errors handed Nadal the opening set after 52 minutes on court.
A wild, misguided forehand sealed his fate, one of 18 unforced errors to Nadal’s 12 in the set.
In their previous nine meetings, all on clay, the man who took the opening set went on to win the match.
That scenario loomed again with Nadal going to 2-0 in the second set on a fifth break point as Thiem fired another backhand wide.
Thiem wasted a break point in the seventh game as Nadal collected a time violation for taking too long to serve.