He won four of his five matches in straight sets, including a 6-4, 6-1, 6-2 victory over fifth-seeded Juan Martin del Potro in the semifinals.
The victory also allowed the 32-year-old Nadal to hold onto the No. 1 ranking, just ahead of Federer.
However, at the most inopportune of moments, Thiem's composure deserted him as a succession of unforced errors - including a simple volley into the net and a routine forehand long - handed Nadal a break to love and the opening set.
GETTY Rafael Nadal vs Dominic Thiem LIVE STREAM Dominic Thiem is chasing his maiden Grand Slam title
Over the decades, those who played under the flag with stars and stripes have reached many records at the Australian Open, Wimbledon and of course at home Major in NY, but they could have never transmitted that success to Paris, winning just four titles at Roland Garros between 1989-1999.
"It's fantastic, I can't describe my feelings because it's not even a dream to win here 11 times", said an emotional Nadal after the final.
Nadal is so dominant and so impervious on clay, in general, and at this tournament, especially, it made sense for Thiem to go for broke as much as possible, accepting that there would be risks along with the rewards.
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.More news: Hurricane Aletta picks up steam, poses no risk to mainland
Information from The Associated Press was used in this report.
Seventh seed Thiem is in his first ever Grand Slam final in the latest high of a fine 2018 season which has seen him win titles in Argentina and Lyon and reach the final in Madrid - where he lost to Alexander Zverev. He pounded huge serves, topping 135 miles per hour (220 kph) - about 25 miles per hour (40 kph) more than Nadal's fastest - and that translated into seven aces, but also five double-faults.
Diego Schwartzman has come closest this fortnight to become the third man to beat Nadal in Paris.
Thiem didn't think that loose game to end the first set was as crucial as it might seemed to everyone else.More news: Chinas export growth steady in May
The summit clash of French Open 2018 will start at 3 pm local time, 6:30 pm IST, 2 pm BST.
As the saying goes, there are only three certainties in life: Death, taxes and Rafael Nadal on clay.
Because there's still no beating Nadal on Parisian clay in the final weekend at Roland Garros.
The 10-time champion is playing Dominic Thiem.More news: Marko Arnautovic dismisses Manchester United speculation
- Trump will not invite Warriors, Cavs to White House
- NASA releases Curiosity rover findings
- UK top court says it can't demand #abortion law change in #NorthernIreland
- Congo government says Jean Pierre Bemba has the right to return home
- Dead Or Alive 6 Announced, Due Early 2019
- IHOP to IHOB name change ‘dumbest’ move ever, brand experts warn
- Rafael Nadal secures 11th French Open title
- Congo Ebola outbreak: WHO records 62 cases, 27 deaths
- Another lottery ticket worth $500000 sold in Thunder Bay
- Alaphilippe wins Criterium Stage 4, Moscon claims lead | AP sports