The 24-year-old Australian fired a one-under-par 70 to finish at 15 under on 269 one shot clear of former US Open champion Jim Furyk.
The duo were paired together for the last two rounds at the Harbor Town Golf Links and the lead exchanged hands several times on the final day after both started the day at 14 under.
Both bogeyed the par-three 17th after missing the green and after the Australian overshot the last with his approach, he got up and down to deny Furyk the chance to force a play-off.
Baddeley became the fourth Australian to win the title and succeeded compatriot Peter Lonard with his 15-under total.
"I was being patient and hanging in there. Today was a great day," said Baddeley. "It was my first wedding anniversary yesterday so it makes it a special week."
Furyk, who missed a 15-foot birdie putt at the last which would have taken the tournament to a play-off, said: "It just needed some putts on the back nine to go in. It came down to putts and he knocked in more than I did."
Americans Vaughn Taylor (66) and Billy Mayfair (69) finished tied for third on 13 under.
World number five Ernie Els had four birdies and a bogey in his first eight holes to get within four of the leaders but he then missed a six-foot putt for birdie at the 10th and another of similar length on the 12th for par.
A miss of even shorter length dropped him back to 11 under at the 13th and out of contention, and the South African closed with a round of 71 to finish joint seventh on 10-under.
Ian Poulter's hopes of boosting his Ryder Cup standing with a good final round took a dive after he carded a three-over-par 74 to finish on one over
Mansfield's Greg Owen had two birdies and a bogey in his round of 70 to lift himself to two-over while Londoner Brian Davis closed with a 73 for three over.
Other Europeans with Ryder Cup aspiration also struggled: Jesper Parnevik (two-over), Thomas Levet (five-over), Carl Petterson (six-over) and Justin Rose (seven-over).