Simpson, from Raleigh, N.C., was five strokes ahead on the back nine. However, Osborn, of Shoal Creek, Ala., made things interesting down the stretch with three birdies at The Dunes Club.
Osborn trailed by two as he and Simpson went to the 18th hole.
And it looked like Osborn would have a chance after Simpson put his approach shot into the pond in front of the 18th green on the way to a double-bogey 6. But Osborn could do no better than bogey after his approach landed in a greenside bunker and Simspon gained the title.
'I guess I was trying to please the crowd,' Simpson said of the closing drama. 'I couldn't imagine my layup would run into the pond. But this is a wonderful victory in a very important tournament and I'm grateful.'
As winner of the Southern Amateur, Simpson receives the chance to play in the PGA Tour's Bay Hill Invitational. Simpson is also likely to earn a spot on the U.S. Walker Cupu team.