In a repeat of this year's French Open final, also won by Halep, the world number one ran out a 7-6 (8/6) 3-6 6-4 winner in a pulsating match of high quality and high drama.
Both players looked on the verge of collapsing with exhaustion as they embraced at the net after a marathon battle lasting two hours and 41 minutes.
In sweltering conditions and amid some brutally long rallies both were regularly doubled up, struggling for breath.
Halep broke serve in the third game and, although Stephens forced a break point in the next, she could not capitalise.
Romanian Halep broke again for 4-1, but amid some fiercely contested rallies Stephens hit back for 4-4.
They exchanged breaks again, Halep failing to serve out the set with American Stephens by now looking the more composed.
Yet Halep saved two set points, and two more in the tie-break, before eventually taking the opener after 70 punishing minutes.
A run of three consecutive breaks at the start of the second was halted by Stephens, who will defend her US Open title later this month, to move 3-1 ahead.
The third seed held on to that advantage before converting a fourth set point on the Halep serve to level an enthralling encounter.
It was Halep who drew first blood in the decider, but Stephens, looking the fresher of the two, pegged her back at 2-2.
However, Halep called on all her reserves of energy to break the resilience of the third seed, shrugging off a double fault at championship point along the way, as she completed a memorable victory.
Halep said on court afterwards: "It's been an amazing week and I feel like I reached my best level of tennis.
"I just didn't give up during the tournament, I fought until the end."
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