Prayad's rounds of 68, 67, 65 and 64 left him with a 24 under-par total of 264 to claim the winner's purse of $180,000 and the King's Trophy donated by the country's monarch.
"This means so much to me," Prayad said moments after signing his scorecard. "Yes I cried a bit... I am happy the King's Trophy will stay in Thailand," according to a statement by organisers.
Prayad took a celebratory jump into the lake adjoining the 18th green after the prize presentation.
Australian Scott Strange (67), who had pushed Prayad all the way, bogeyed on the last to leave him two strokes adrift.
Countryman Nick Cullen (65) was a shot further behind while six players shared fourth place -- including defending champion Chris Wood (70).
Overnight leader Lucas Lee of Brazil struggled to get his round together and had to settle for a share of 12th after carding a 73, while three-time major winner Padraig Harrington (66) could not recover from a disastrous third-round 75 and finished at 14 under.
Only two other Thais have won the national open -- Suthep Meesawat (1991) and Boonchu Ruangkit (1992, 2004).
Two shots off the pace overnight and starting in the second last group of the day, Prayad, 47, had a birdie-birdie-birdie start -- although a bogey on the easy par-five fifth briefly halted his progression.
Four birdies in-a-row straddling the turn put him back in the driver's seat, and an audacious chip-in birdie from the fringe on the 16th meant the chasing pack had it all to do.
Completed scores after the final round (par 72)
264 - Prayad Marksaeng (THA) 68-67-65-64.
266 - Scott Strange (AUS) 66-65-68-67.
267 - Nick Cullen (AUS) 69-67-66-65
268 - Hwang Jung-gon (KOR) 65-68-72-63, Cho Min-gyu (KOR) 65-68-69-66, David McKenzie (AUS) 65-68-68-67, Simon Yates (SCO) 66-69-64-69, Chris Wood (ENG) 67-66-65-70, Hu Mu (CHN) 67-67-64-70.
269 - Hideto Tanihara (JPN) 67-67-70-65, Terry Pilkadaris (AUS) 68-64-68-69.