The Argentinian wild-card entry - beaten finalist in Tokyo five years ago - overcame his Canadian opponent 7-6 (7/5) 7-5 to climb to fifth position in the Emirates ATP Race To London and condemn Raonic to a second straight runner-up finish at the event.
"I played really well in the last two games of the match, returning all of his first serves," Del Potro said on www.atpworldtour.com after his triumph in sun-drenched conditions at the Ariake Coliseum, venue of the Tokyo 2020 Olympic tennis competition.
"It was a fantastic week for me as I played better and better with each match."
Raonic dropped just six points on serve in the first set and forced three break-point opportunities, but could not capitalise and Del Potro held his nerve in the tie-break.
Del Potro, 25, then secured the crucial break of serve with a forehand winner in game 11 of the second set and minutes later had claimed his third ATP World Tour title of the year following wins in Rotterdam and Washington.
"You have to be focused and wait for the chance," he said of facing the Raonic serve. "I took my serve in the last game to break. In the tie-break, he hit a double fault in the most important part of the match and then my chance came, which I knew I had to take.
"I did what I could to win. When he serves well and hits aces, it means I have to be aggressive on serve. I threw in drop shots and came to the net to mix up my game."
Del Potro's victory ended Raonic's eight-match winning streak, but the 22-year-old was not too disheartened.
"There is not really much to be down about," said Raonic, winner of last week's Thailand Open in Bangkok. "I created opportunities and, barring a double fault and a few points, I could not have done much better.
"I think I am doing a lot of things better, week in week out. I can play a good level, but I just need to improve on a consistent basis. There is work to be done."