Ruud had to dig deep in the deciding set, breaking Sousa when the Portuguese was serving for the title at 5-4, before going on to win 7-6 (7-3) 4-6 7-6 (7-1).
The world No.9 has now won six of his past seven ATP 250 events on clay, and is the first player since Stan Wawrinka (2016 and 2017) to win more than one Geneva Open title.
Ruud served five aces in the first set on his way to edging a tie-break, but a determined Sousa was able to level in a second set in which he won eight of 11 second-service points.
It looked like Sousa would cause an upset against the tournament's second seed when serving for the match, only for Ruud to break back and use that momentum to take the win.
The Norwegian made the semi-finals at the Internazionali d'Italia last week and maintained his momentum ahead of the French Open by lifting the trophy in Switzerland.
"It was one of the craziest matches that I have ever played," he said. "It was a lot of up and down. Sousa was close to winning and then suddenly everything turns around and this is tennis.
"This win feels so good, but you have to give a lot of credit to Joao because he fought back from one set down and has been playing well all week.
"It was just a matter of one or two points today and luckily they went in my favour."
At the Lyon Open, it was Cameron Norrie who emerged triumphant as the Brit beat Alex Molcan 6-3 6-7 (3-7) 6-1.
Norrie, who was beaten by Stefanos Tsitsipas in last year's final, was largely on top throughout, firing down six aces and boasting an impressive success rate of 72 per cent of first serve points won, while also saving five of seven break points against his Slovakian opponent.
The No.1 seed could have won in straight sets, but was unable to convert two match points in the second before being forced to a decider by Molcan.
It is Norrie's second ATP title of the season and the fourth of his career. It is his first on clay as he prepares for the second grand slam of the year at Roland Garros.
"It is my first title on the clay so it means a lot to me," Norrie said. "I can't be happier with how I handled everything this week. This one feels the best so far. I don't know why, it is just so special and I couldn't be happier and am really speechless right now. It was an incredible atmosphere. Thanks to everyone for coming out.
"I had chances to close the matches in straight sets this week and get it done easier than usual and it didn't go that way and I was able to let that go and respond. In the third set I moved really well and it is nice to get over the line."