The exciting 23-year-old Briton, who will become a top-five player next week, fought back to level the match after losing the opening set on Sunday, but it was three-time grand slam finalist Ruud, so often an underrated star, who held the edge on the crucial points.
Draper was bidding for a second ATP 1000 title in two months following his Indian Wells triumph in mid-March, but he fell short against the tough Norwegian, who triumphed 7-5 3-6 6-4 in just under two-and-a-half hours.
The 26-year-old 14th seed, playing in his 18th clay-court final, overcame both a rib injury sustained in the semi-final and the resilient Draper to secure the trophy after previously dispatching Taylor Fritz, Daniil Medvedev and Francisco Cerundolo.
"It's been a long time coming. I have been dreaming about this since I was young. I knew Jack was playing unbelievable, so I had to bring my A-plus game," Ruud said in an on-court interview.
Draper had looked to be in control early in the first set as he set off in pursuit of a first ATP clay-court crown, forcing the first break of serve to lead 3-1, but from 5-3 down Ruud launched a superb counter-offensive, reeling off four successive games to take the first set in 52 minutes.
The turnaround left Draper furious as he remonstrated with himself and his coach, but he quickly regrouped to play solidly before ripping a forehand winner to break Ruud for a second time and move 4-3 ahead.
Draper then showed resilience to fend off two break points in the next game to move 5-3 up before breaking Ruud for the third time in the match to level it up at one set each.
The Briton produced a pivotal hold at 1-1 in the decider, surviving three break points in a game that lasted over 10 minutes to edge 2-1 ahead.
Both players came under heavy pressure on serve, with Draper letting slip two break points as Ruud drew level at 2-2 before winning the next two games to move 4-2 in front.
Draper was a point away from going 5-2 down, but dug deep to hold and trail 4-3, and after both players won their next service games, Ruud made no mistake when serving for the title at 5-4.
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