Third-seeded Fritz claimed the title 7-6 (7/3), 7-6 (7/2), and will break into the top 10 for the first time on Monday with a new ranking of eight.
The American described his victory as "really crazy", coming immediately after a week of Covid-19 hotel quarantine in Seoul that forced him to withdraw from the Korea Open.
But his first words on court after winning were for fourth-seeded Tiafoe, who has been in the spotlight since he stunned Rafael Nadal (36) to reach the US Open semi-finals.
"First off, I wanna congratulate Frances on a great week, I mean, he's been on fire recently, and I had to play my absolute best to beat him today," Fritz said.
"We've spent a lot of time together the last couple weeks, he's one of my really close friends, and I'm sure it's not going to be the last time we play for a big-timer."
Both players were in the Rest of the World Team that beat Europe last month at the Laver Cup in London for the first time in the competition's history.
Fritz - the first American to win the Japan Open since Pete Sampras in 1996 - said he felt "extremely calm, and I felt like I had a lot of clarity" throughout Sunday's one hour and 56min final.
"I served extremely solid the whole match, I never really had any times in the match where the serve dropped," he said.
Tiafoe appeared exasperated at times by his opponent's skilful play, chucking his racquet at the ground in frustration during the final tie-break.
"Great week for sure, bittersweet obviously, I really wanted to win today," he told reporters.
Tiafoe said Fritz had "just played really aggressive, didn't really miss when it mattered, and he just played the bigger points a little better than I did".
But he also stressed that the two US players had a "good brotherhood".
"We're only going to get better, we're only going to push each other, and I think what he's doing is going to help me for sure."
