The American had earlier ended the hopes of Frenchman Victor Perez but he faced an in-form man in Scheffler, with the crowd at Austin Country Club firmly behind the University of Texas alumnus.
Perez lost the consolation match 2&1 to Matt Kuchar but achieved his second top five in just five WGC appearances.
Horschel came into this week as the 32nd seed and advanced from Group Four after a play-off with Max Homa.
A 3&2 victory over Perez sent him into the showpiece match and while he only made one birdie in 17 holes against Scheffler, that was enough to hand him the Walter Hagen Cup.
Horschel finished second at the WGC-Workday Championship at The Concession in February and after earning his two best European Tour finishes in back to back starts, he is now aiming to take on Europe in The Ryder Cup later this year.
"I feel like I should have been on Ryder Cup teams before but that's my fault because I haven't done what I needed to do to take care of that," he said.
"If I do happen to make a Ryder Cup team in my career, I'll be happy because I feel like that's one check I can check off of what I have wanted to accomplish in this game.
"I should have at least contended more in some of these WGC events and Majors."
I should have at least contended more in some of these WGC events and Majors - Billy Horschel
On the final, he added: "It was one of those days where I didn't play very good. I didn't hit it very good, I didn't feel good with my swing so I was just grinding it out.
"I wish I would have hit it better so I would have had a closer chance of making birdie, obviously it was a tough day. I had two opponents that played really good today but just didn't make any putts and I did and that's the difference."
Scheffler went one up as he birdied the second after Horschel had found a native area with his tee shot and taken a drop.
Horschel looked to be on the back foot as he found himself shortsided in the greenside rough on the fifth but he chipped in for a birdie to square the match.
Scheffler made a remarkable par on the sixth after taking a drop following an errant tee shot but he then missed the green at the par three seventh and a clumsy chip allowed Horschel to move one up with a par.
The local favourite was looking out of sorts and a long three putt from the fringe on the ninth handed Horschel a two up lead heading into the back nine.
Both men then made a mess of the 12th, with Scheffler finding water and Horschel sand but the par five was halved in bogeys.
The next was halved in pars after Scheffler saw his third shot only stopped from going into the water by inches due to a cushion of rough, and the 24-year-old missed a golden opportunity from five feet on the 14th.
A brilliant up and down from the sand at the 16th saw Horschel maintain his cushion and when the 17th was halved in pars, the match was over.
In the consolation contest, Perez got in big trouble around the green on the first to record a triple bogey but hit back straight away with a 20 footer on the second to square things up.
The next five holes were halved before Perez chipped into a bunker on the eighth to leave Kuchar one up at the turn.
Perez then failed to get up and down from a bunker on the tenth and when Kuchar put his tee shot to eight feet on the next, the American was three up.
A smart up and down on the par five 12th handed Kuchar another birdie and at four up with six to play, the 42-year-old was in control.
Perez responded by putting approaches to four and eight feet for back to back birdies on the 13th and 14th to halve the deficit but that was the closest he would get.