Third seed Isner needed two tie-breaks to see off first-time finalist Lu, the American winning 7-6 (7/4) 7-6 (9/7).
Isner won the first title of his career at the New Zealand tournament in 2010, and the two trophies are the only ones he has collected outside of the US.
The 28-year-old, who almost did not start the tournament because of an ankle injury, said: "I wish it didn't have to be so close at the end, it gives me a lot of grey hairs. But I'm so happy.
"To say this was unexpected, coming into the tournament, would be a huge understatement. Sometimes that's how things work out. You come in with low expectations, the pressure's off, and things tend to work out. That was the case this week."
Isner plays lucky loser Martin Klizan in the first round of the Australian Open on Tuesday, while Lu meets qualifier Jimmy Wang, his Chinese Taipei compatriot.
Lu beat defending champion David Ferrer in the semi-finals, and he said: "I had a great week and I'm happy with my performance. I hope I can keep it going now into next week."