Fred Gibson also posted a 66 in the final round at Egypt Valley Golf Club to take second place alone at 12-under-par 204. Bob Gilder, who shared the 36-hole lead with an absent Andy Bean, was one shot further back at 11-under-par 205.
Thorpe, who was three shots off the pace in a tie for third to start the day, jumped out of the gate with a birdie at the opening hole. He added a birdie at the third and reached 10 under with a birdie at the fifth.
The 55-year-old kept on rolling with a birdie at the par-3 eighth and he joined Gilder atop the leaderboard with a birdie at the 10th.
Thorpe took the lead for good with a birdie at the 13th and began to pad his advantage with a birdie at the par-4 14th. Thorpe then pulled three shots clear of his competitors with a birdie at the 17th and held on for the win despite finding trouble on the closing hole.
He walked off the 18th green with a double bogey, but Thorpe's winning score was good for $240,000.
'I made some mistakes on 18 and I don't like to finish like that,' said Thorpe, who has at least one win in five straight years on the Champions Tour. 'I got off to a good start and a got a good lead. I have had a lot of good rounds here.'
Gibson tallied his first birdie of the day at the par-5 third, but ran off four consecutive birdies starting at the par-5 seventh to make his move up the leaderboard.
The 56-year-old stumbled to a bogey at the 12th, but closed with birdies on each of his last two holes for his best finish on the Champions Tour since he shared second at the Napa Valley Championship in 2002.
Gilder had a solid front nine with a pair of birdies, but he was unable to keep pace with Thorpe on the inward half. He fell further back with a bogey at the 15th and posted a 71 to share third place.
Hale Irwin, who won his fourth Senior PGA Championship last Monday at Valhalla, shot a 68 to join Mark McNulty in a tie for sixth at 10-under-par 206. Allen Doyle and Graham Marsh followed at 9-under-par 207.
Bean, who was seeking his first career victory on the Champions Tour, was tied with Gilder and preparing for his final round when he became ill on the driving range because of something he ate. The 51-year-old was taken to Spectrum Health Downtown Center for observation and had to withdraw.
'I didn't want to withdraw but I had no choice,' Bean said upon his return to the course. 'I was looking forward to playing. It's disappointing not to be able to play.'