Jones earned the title "Queen of Corning" as the leading money-winner in the tournament's 24-year history. But she could not catch Diaz down the stretch and settled for her second runner-up finish here.
Diaz, 27, joined Swedish superstar Annika Sorenstam as the only multiple winners on the LPGA Tour this season. She shot a 2-under-par 70 for a four-round total of 14-under 274.
"It's awesome," said Diaz, who won $150,000 to move into second place on the money list. "Rosie's a great player. I knew it would be a battle between her and somebody. I'm just glad it was me, and I won the battle."
Diaz took a one-shot lead to the 18th hole, then all but sealed her second career win by leaving her approach shot just three feet from the cup.
Jones' second shot at the par-4 closing hole rolled off the green and she ran her birdie putt by the hole. She carded a 1-under 71 and settled for her best showing of the season, eclipsing a pair of third-place ties.
Marnie McGuire and Italy's Silvia Cavalleri shared third place at 11-under 277, one stroke better than Korean rookie Jung Yeon Lee.