It was Stephens' first loss in a tournament final after going 6-0 in her previous appearances.
"Not the trophy I wanted but it's still handsome", Stephens said afterward, then pointed her words to Halep and said, "no one else I'd rather lose to than No. 1 in the world".
Top-ranked Simona Halep won the French Open Saturday by defeating Sloane Stephens 3-6, 6-4, 6-1. I stayed focused, and I didn't give up, which is the most important thing in my game.
"I believed in that, and my game was more relaxed". She lost the title match to Caroline Wozniacki at the Australian Open in January.
Halep managed to save three break points, including one with a powerful forehand victor down the line, but the Romanian dropped her serve on Stephens' next chance when she could not properly return a clever lob from her American rival.
Stephens indicated to Halep she should raise it proudly overhead.
Halep, now with momentum on her side, continued to push forward and broke Stephens' serve in the very first game of the third set.
"Her journey has been tough and she had a heartbreak here past year and in Australia and all the things that have happened to her", Stephens said.More news: French Open quarter-finals: Nadal v Schwartzman and Cilic v Del Potro
"She just raised her level and started playing better". Yet Stephens completed a scarcely believable return from injury by winning last year's US Open, becoming only the fifth unseeded woman to win a major singles title in the open era.
Stephens forced Halep to serve it out but, as yet another chorus of "Simona" rang around Court Philippe Chatrier from the vast Romanian contingent, she did just that.
The duo have played each other seven times previously with Halep winning on five occasions including their last meeting at Roland Garros in 2014.
Having worked her way into a strong position in the point Halep netted a straightforward backhand and let her off the hook.
The rather tortured global odyssey of No. 1-ranked Simona Halep finally found its way on Saturday to a patch of Roland Garros clay just behind a baseline, where the slightly built Romanian with the considerable will dropped her racket and stood, amazed, hands on head. The matchup was the first All-American semifinal match at Roland Garros since 2002.
But from 0-2 down in the second set, Halep was able to change the flow of the match. "I think that we'll just have to go out and compete".
Halep defeated Sloane Stephens 3-6, 6-4, 6-1 to claim her first Grand Slam title.
A first-ever Grand Slam final defeat in straight sets for Halep looked likely as soon as Stephens claimed the first game of the second set on her fourth break point. She has now rid herself of the status of being the best women's player never to have won a Major.
Both Halep and Cahill thought Stephens looked a little gassed.